Company Which Borrows $1 Million Long-Term and Invests the Proceeds

question 52

True/False

Company which borrows $1 million long-term and invests the proceeds in inventory will see a $1 million increase in its net working capital.

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Definitions:

Request for Quotation (RFQ)

A document issued by a buyer to suppliers, inviting them to submit a bid specifying the pricing and terms under which they would commit to sell a product or service.

Strategic Purchase

The acquisition of goods or services with a long-term perspective, considering factors such as cost, quality, and supplier relationships for competitive advantage.

Supply Department

The division within an organization responsible for managing the procurement and supply of goods and services.

Offshore Suppliers

Businesses located in another country that provide goods or services to companies, often to leverage cost advantages.