Which of the Following Statements About Net Working Capital (NWC)

question 76

Multiple Choice

Which of the following statements about net working capital (NWC) is correct?

• A) NWC is positive for all firms.
• B) As NWC decreases, potential liquidity increases.
• C) NWC excludes inventory, which is deemed illiquid.
• D)Decreases in NWC can increase the firm's risk.

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Definitions:

Authority

The authority or capability to make decisions, issue commands, and ensure compliance.

Chaos

A state of extreme confusion and disorder, where there is little to no predictability or control.

Strategic Leaders

Individuals who have the responsibility of guiding an organization towards achieving its long-term goals and objectives.

Visionary Abilities

The capacity to foresee future trends, challenges, and opportunities, enabling leaders to steer organizations effectively towards long-term goals.