For Most Corporations, Net Working Capital Is

question 56

Multiple Choice

For most corporations, net working capital is:

• A) negative during the inventory period of the cash conversion cycle.
• B) equal to the amount of current assets.
• C) positive to provide liquidity during the cash conversion cycle.
• D)present only during slack periods of the year.

---

Definitions:

Future Cash Inflows

Expected incoming funds or earnings generated from investments, operations, or financial activities in the future.

Discount Rate

The discount rate that's used to estimate the present value of future cash flows within discounted cash flow analysis.

Net Present Value

Net Present Value (NPV) is a financial metric used to evaluate the profitability of an investment, calculated by summing the present values of incoming and outgoing cash flows over a period of time.

Net Present Value

A method used in capital budgeting to assess the profitability of an investment or project, calculated by discounting all expected future cash flows to the present value.