In General, the More Net Working Capital a Firm Has

question 241

Multiple Choice

In general, the more net working capital a firm has, ________.

• A) the greater its risk
• B) the lower its risk
• C) the less likely are creditors to lend to the firm
• D) the lower its level of long-term funds

---

Definitions:

Cost Of Goods Manufactured

The cost of goods manufactured refers to the total production cost of goods completed during a specific period, including materials, labor, and overhead costs.

Work-In-Process Inventory

The cost of unfinished goods in the manufacturing process including labor, material, and overhead.

Total Manufacturing Cost

The aggregate cost of direct materials, direct labor, and manufacturing overhead utilized in producing goods within a reporting period.

Direct Labor Costs

Expenses associated with the labor directly involved in the production of goods or provision of services.