Management of Working Capital Is Important Because It Affects the Firm's

question 62

Multiple Choice

Management of working capital is important because it affects the firm's:

• A)profitability.
• B)risk.
• C)liquidity.
• D)all of the above.

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Definitions:

Work In Process Inventory

The portion of inventory representing goods partially completed, encompassing all direct materials, work in progress labor, and manufacturing overhead costs.

Direct Costs

Costs that can be directly attributed to the production of a product or service, such as materials and labor.

Indirect Costs

Expenses that are not directly attributable to the production of goods or delivery of services but are necessary for the operation of a business, such as utilities or rent.

Cost Object

Anything for which a separate measurement of costs is desired, such as a product, service, project, or activity.