A Company That Borrows $1 Million Long Term and Invests

question 44

True/False

A company that 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:

Reasonable Manner

Acting in a way that is considered sensible and appropriate under the circumstances by a standard of a reasonable person.

Necessary

Refers to something that is essential or required in a particular situation or for a particular process.

Adequate Food

Having access to sufficient quantities of food that is nutritious and safe to eat, fulfilling dietary needs for an active and healthy life.

Lodging

Lodging refers to temporary accommodations for travelers, such as hotels, motels, inns, or short-term rentals.