Which One of the Following Will Increase Net Working Capital

question 55

Multiple Choice

Which one of the following will increase net working capital? Assume the current ratio is greater than 1.0.

• A)paying a supplier for a previous purchase
• B)paying off a long-term debt
• C)selling inventory at cost
• D)purchasing inventory on credit
• E)selling inventory at a profit on credit

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Definitions:

ATC

The total production cost per unit, calculated by dividing the entire cost of production by the number of products made.

Long-Run Equilibrium

A state in which all factors of production and costs are variable, and economic forces are balanced, leading to no net tendency for the market to change.

Monopolistic Competition

A market structure characterized by many firms selling similar but not identical products, allowing each to maintain some control over pricing.

Monopolistically Competitive

Pertains to a market structure where many firms sell products that are similar but not identical, allowing for some degree of market power and product differentiation.