Which of the Following Changes in Working Capital Will Result

question 52

Multiple Choice

Which of the following changes in working capital will result in an increase in cash flows?

• A) Increase in accounts payable
• B) Increase in inventories
• C) Increase in accounts receivable
• D) Decrease in other current liabilities

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Definitions:

Market Imperfections

Occur when conditions for perfect market competition are not met, leading to inefficiencies such as monopolies or information asymmetries.

Stock Dividend

A dividend payment made in the form of additional shares rather than a cash payout, to shareholders.

Dividend

A portion of a company's earnings distributed to its shareholders, typically in the form of cash payments or additional shares.

Dividend Cuts

A reduction in the dividend payments issued by a company, which can signify financial distress or a reallocation of funds.