Rao Corporation Has the Following Balance Sheet A) $5400
B) $60

question 76

Multiple Choice

Rao Corporation has the following balance sheet. How much net operating working capital does the firm have?
$\begin{array}{lcr}\text { Cash } & \$ 10 \text { Accounts payable } & \$ 20 \\\text { Short-term investments } & \text { Accruals } & 20 \\\text { Accounts receivable } & \text { 50Notes payable } & 50 \\\text { Inventory } & \$ 40 \text { Current liabilities } & 90 \\\text { Current assets } & \$ 130 \text { Long-term debt } & 00 \\\text { Net fixed assets } & \$ 100 \text { Common equity } & 30 \\& \text { Retained earnings } & 50\\\text { Total assets } & \text { \$ 230 Total liab. \& equity . } &\$2 30 \\\end{array}$

• A) $54.00
• B) $60.00
• C) $66.00
• D) $72.60
• E) $79.86

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Definitions:

Long-run Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity supplied over a long period, when all inputs can be varied.

Profit per Unit

Is the difference between the selling price of a product and the cost to produce it, expressed on a per-unit basis.

Perfect Competition

Perfect competition describes a market structure where numerous small firms compete against each other, and goods are homogeneous, leading to no single firm having market power and prices being determined purely by supply and demand.

Economic Profits

The excess of total revenues over total costs, including both explicit and implicit costs.