If Demand for a Firm's Products Suddenly Increases So That

question 73

Multiple Choice

If demand for a firm's products suddenly increases so that inventory decreases while sales increase, how will the firm's needs for net working capital react?

• A) Net working capital would increase.
• B) Net working capital would decrease.
• C) There would be no change in net working capital.
• D) Net working capital would first decrease, then increase slowly over time.

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Definitions:

Intelligence Quotient

A measure of a person's intellectual abilities in relation to others, based on standardized tests.

Analytical Intelligence

The component of intelligence involved in problem-solving, logical reasoning, and the ability to analyze and evaluate.

Spatial Intelligence

The ability to visualize, manipulate, and reason with objects in three-dimensional space.

Practical Intelligence

The ability to solve everyday problems by utilizing knowledge gained from experience rather than theoretical understanding.