When Constructing a Pro Forma Statement, Net Working Capital Generally

question 19

Multiple Choice

When constructing a pro forma statement, net working capital generally:

• A) remains fixed.
• B) varies only if the firm is currently producing at full capacity.
• C) varies only if the firm maintains a fixed debt-equity ratio.
• D) varies only if the firm is producing at less than full capacity.
• E) varies proportionally with sales.

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