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:

Novel

New or not previously identified, often referring to ideas, products, or phenomena that are innovative or unprecedented.

Stickiness

The ability of a product, service, or website to retain user interest and engagement over time.

The Tipping Point

A concept describing the moment when a trend, idea, or behavior becomes significantly widespread or influential.

The Law of the Few

A principle suggesting that a small number of people are responsible for the majority of any effect, especially in the context of social epidemics.