Which of the Following Actions Will Cause a Firm's Net

question 86

Multiple Choice

Which of the following actions will cause a firm's net working capital to decrease?

• A)The firm relaxes its credit policy.
• B)The firm increases its usage of accruals.
• C)The firm pays off a short-term bank loan with cash.
• D)None of these will cause a firm's net working capital to decrease.

---

Definitions:

Peer Pressure

The influence exerted by a peer group, encouraging individuals to change their attitudes, values, or behaviors to conform to group norms.

Asch Experiment

A series of psychological experiments conducted by Solomon Asch studying if and how individuals yielded to or defied a majority group.

Groupthink

A phenomenon that occurs within a group of people in which the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.

Binge Drinking

The consumption of an excessive amount of alcohol in a short period, often defined as five or more drinks for men, and four or more for women, in about two hours.