Relative to Cash Flows Affecting Net Working Capital, All of the Following

question 70

Multiple Choice

Relative to cash flows affecting net working capital, all of the following are true EXCEPT

• A) cash inflows are generally more predictable than cash outlays.
• B) cash outlays for current liabilities are relatively predictable.
• C) the more predictable the cash inflows, the less net working capital a firm needs.
• D) because most firms are unable to match cash inflows to outflows with certainty, current assets that more than cover outflows for current liabilities are necessary.

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Definitions:

Capacity

The maximum level of output that a system, facility, or organization can produce or handle under normal operating conditions.

Material Requirements Planning

A production planning, scheduling, and inventory control system used to manage manufacturing processes efficiently.

Master Production Schedule

A detailed plan that outlines what a manufacturing facility will produce, in what quantities, and when, to meet anticipated demand.

Bill of Material

A comprehensive list of raw materials, components, and instructions required to construct, manufacture, or repair a product or service.