Which One of the Following Statements Concerning Net Working Capital

question 27

Multiple Choice

Which one of the following statements concerning net working capital is correct?

• A)The lower the value of net working capital the greater the ability of a firm to meet its current obligations.
• B)An increase in net working capital must also increase current assets.
• C)Net working capital increases when inventory is sold for cash at a profit.
• D)Firms with equal amounts of net working capital are also equally liquid.
• E)Net working capital is a part of the operating cash flow.

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Definitions:

Fraud

Intentional misleading to achieve illicit benefits or to cheat someone out of their rightful entitlement.

Big Five

A personality model that outlines five major traits used to describe human personality: openness, conscientiousness, extraversion, agreeableness, and neuroticism.

Extraversion

A personality trait characterized by sociability, talkativeness, assertiveness, and high levels of emotional expressiveness.

Imaginative

Possessing the ability or tendency to think creatively and inventively, often leading to new ideas or concepts.