Which of the Following Is True of Net Working Capital

question 113

Multiple Choice

Which of the following is true of net working capital?

• A) When current assets of a firm exceed its current liabilities,a firm is said to have negative net working capital.
• B) When current assets of a firm are less than its total assets,a firm is said to have positive net working capital.
• C) When current assets of a firm exceed its current liabilities,a firm is said to have positive net working capital.
• D) When current assets of a firm exceed its total assets,the firm is said to have negative net working capital.

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Definitions:

Loan Payments

Periodic payments made towards the balance and interest of a loan, following a predefined schedule until the loan is fully repaid.

Chapter 7

A provision under U.S. bankruptcy law for liquidating a debtor's assets to pay off creditors.

Unperfected Security Interests

A claim or lien on a debtor's property that has not met the legal requirements for enforceability against other creditors or in bankruptcy.

Secured Parties

Creditors that hold an interest in a debtor's collateral as security for the repayment of a loan or obligation.