A Company That Borrows $1 Million Short Term and Invests

question 18

True/False

A company that borrows $1 million short term and invests the proceeds in inventory will see no change in its net working capital.

---

Definitions:

Provincial Personal Property

Assets and items of personal property as defined and regulated by provincial law in Canada.

Security Interest

Security interest is a legal claim on assets which are offered by a borrower to a lender as collateral for a loan or obligation.

Security Registration Legislation

Laws and regulations tasked with governing the registration, offering, and sale of securities to protect investors and prevent fraud.

Automobile

A wheeled motor vehicle used for transporting passengers, which also carries its own engine or motor.