Working Capital Management

question 45

Multiple Choice

Working capital management:

• A) ensures that sufficient equipment is available to produce the amount of product desired on a daily basis.
• B) ensures that long-term debt is acquired at the lowest possible cost.
• C) ensures that dividends are paid to all stockholders on an annual basis.
• D) balances the amount of company debt to the amount of available equity.
• E) is concerned with the upper portion of the balance sheet.

Understand the concept of economic profit in comparison to the return on investment and interest rates in the market.

Distinguish between households and firms in terms of supply and demand in the capital market.

Recognize the role and impact of retained earnings on corporate investment and shareholder value.

Understand the importance of innovation and risk in earning profits within competitive markets.

---

Definitions:

Negative

Refers to a value or expression that represents less than zero, or a pessimistic outlook or assessment in various contexts.

Self-Awareness

An understanding of one's self, including their emotions, character, motivations, and longings.

Narcissism

A characteristic of personality marked by an exaggerated feeling of self-worth, a strong desire for abundant attention and praise, and an absence of compassion for others.

Marry

The legal or formal union of two people as partners in a personal relationship, recognized by law or cultural norms as a marriage.