Use the Table for the Question(s)below

question 53

Multiple Choice

Use the table for the question(s) below.
The data above shows the net working capital requirements for Flinder's Camping,a company that makes tents.All figures are in thousands of dollars.
-What can be considered the firm's permanent working capital?

• A)$390,000
• B)$510,000
• C)$720,000
• D)$1,030,000
• E)$640,000

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Definitions:

Commercial Substance

A situation where a transaction causes a significant change to the future cash flows of a company.

Book Value

The value of an asset according to its balance sheet account balance, calculated as the original cost of the asset minus any accumulated depreciation, amortization, or impairment costs.

Market Value

Market value refers to the current price at which an asset or service can be bought or sold on the open market.

Disposal

The act of getting rid of something, especially by throwing it away or by selling or giving it to someone.