Yukon Company Has Total Current Liabilities Equal to $600,000 and Working

question 94

Multiple Choice

Yukon Company has total current liabilities equal to $600,000 and working capital of $30,000. Northwest Company has the same amount of working capital, but it has total current liabilities of $40,000. The company with the better working capital position:

• A)is Northwest Company.
• B)is Yukon Company.
• C)is neither Northwest nor Yukon. They both have exactly the same working capital position.
• D)cannot be determined from the information given.

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Definitions:

Pure Monopolist

A market structure in which a single company has exclusive control over the supply of a product or service, with no close substitutes.

Monopoly Profit

The excess earnings that a monopolist can secure over and above the earnings that could be achieved in a competitive market, due to the control over market prices.

Purely Monopolistic

A market structure in which a single company exclusively owns, produces, and sells a specific product or service, facing no competition.

Profit-Maximizing

A strategic goal of firms to achieve the highest possible profit by adjusting production volume, pricing, and other operational aspects.