A Small Company Has Current Assets of $112,000 and Current

question 38

Multiple Choice

A small company has current assets of $112,000 and current liabilities of $117,000.Which of the following statements about that company are most likely to be true?

• A)Since net working capital is negative,the company will not have enough funds to meet its obligations.
• B)Since net working capital is high,the company will likely have little difficulty meeting its obligations.
• C)Since net working capital is very high,the company will have ample money to invest after it meets its obligations.
• D)Since net working capital is nearly zero,the company is well run and will have little difficulty attracting investors.

---

Definitions:

Mnemonic Device

A technique that aids in remembering information by associating it with easily remembered words, phrases, or images.

Memory Traces

Hypothetical biological substrates that represent the physical manifestation of memories.

Temporal Contiguity

The principle that events experienced close together in time are likely to be perceived as related.

Organizational Factors

Elements related to the structure, culture, and management practices of an organization that influence its functioning and performance.