A Firm Has $820 in Inventory,$3,200 in Fixed Assets,$670 in Accounts

question 30

Multiple Choice

A firm has $820 in inventory,$3,200 in fixed assets,$670 in accounts receivable,$390 in accounts payable,$500 in long-term debt,and $360 in cash.What is the amount of the net working capital?

• A)$890
• B)$960
• C)$3,600
• D)$3,340
• E)$1,460

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Definitions:

Useful Life

The estimated lifespan of a depreciable asset during which it can be expected to contribute to company operations.

Average Rate of Return

A financial metric used to evaluate the profitability of an investment, calculated as the average annual profit divided by the initial investment cost.

Residual Value

The estimated value that an asset will realize upon its disposal at the end of its useful life.

Useful Life

The estimated period over which a fixed asset is expected to be usable by a company, beyond which it is considered to depreciate.