Use the Table for the Question(s)below

question 18

Multiple Choice

Use the table for the question(s) below.
-The above diagram shows a balance sheet for a certain company. If the company buys new property, plant and equipment today using its entire cash balance, what will its net working capital be?

• A)-$5 million
• B)-$15 million
• C)$15 million
• D)$60 million

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Definitions:

June Cash Budget

A financial plan that estimates the cash inflows and outflows for a business during the month of June, aiding in managing liquidity.

Cash Receipts

Money received by a business or individual, often recorded in the financial records to track income.

Cash Payments

Money disbursed by a business for various purposes, including operating expenses, debt repayment, and asset purchases.

Activity-Based Budgeting

A budgeting approach where budgets are developed based on the activities and resources needed to achieve specific goals or outputs.