Which of the Following Statements About Net Working Capital (NWC)

question 76

Multiple Choice

Which of the following statements about net working capital (NWC) is correct?

• A) NWC is positive for all firms.
• B) As NWC decreases, potential liquidity increases.
• C) NWC excludes inventory, which is deemed illiquid.
• D)Decreases in NWC can increase the firm's risk.

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Definitions:

Somatosensory Homunculus

A visual representation of the body within the brain, illustrating the proportion of sensory nerves dedicated to different parts of the body.

Sensory Input

Information received by the senses (sight, sound, smell, taste, and touch) that is then sent to the brain for processing.

Primary Motor Cortex

A section of the cerebral cortex tasked with the planning, control, and initiation of voluntary movements.

Primary Somatosensory Cortex

The primary area of the brain responsible for processing somatic sensations, such as touch, temperature, pain, and proprioception.