A Firm Paid Out a Dividend of $700,000 and Repaid

question 58

Multiple Choice

A firm paid out a dividend of $700,000 and repaid $1,000,000 notes payable.The net effect of these transactions on the firm's net working capital is:

• A)Decrease of $1,700,000
• B)Decrease of $1,000,000
• C)Decrease of $700,000
• D)Decrease of $300,000

---

Definitions:

Quantity

The amount or number of a material or immaterial good that is measured or counted.

Market Price

The price at which goods and services are currently being sold in the market, influenced by supply and demand.

Equilibrium Price

The price point in the market at which the amount of goods being offered is equal to the amount of goods being sought.

Quantity Supplied

The volume of a commodity or service that sellers are ready and capable of providing at a specific price within a given period.