Which of the Following Will Not Increase Your Liquidity

question 112

Multiple Choice

Which of the following will not increase your liquidity?

• A) Selling a boat and depositing the proceeds in your checking account
• B) Selling a car in exchange for cash
• C) Selling stock in exchange for cash
• D) Using cash to purchase a home entertainment system

---

Definitions:

Incremental Cash Flows

The additional cash flow a company receives from taking on a new project, excluding any cash flows not directly attributable to the project.

Cash Expense

Expenses that require immediate outlay of cash during an accounting period.

Depreciation

The reduction in the value of an asset over time, usually due to wear and tear or obsolescence.

Net Working Capital

The difference between a company's current assets and current liabilities, indicative of its short-term financial health and operational efficiency.