Which One of the Following Will Cause a Reduction in the NWC

question 29

Multiple Choice

Which one of the following will cause a reduction in the NWC turnover ratio all else held constant?

• A) A decrease in sales
• B) An increase in average payables
• C) An increase in average inventory
• D) An increase in the average cash balance

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Definitions:

Ratified

Formally approved or confirmed, often in the context of treaties, contracts, or legislative acts.

Promissory Note

A written, legally binding document in which one party promises to pay another a definite sum of money either on demand or at a fixed future date.

Alcohol-Related Incapacity

A state of being unable to function or make decisions due to excessive consumption of alcohol.

Misrepresentation

A false statement of fact made by one party to another party, which has the effect of inducing that party into a contract.