A Small Company Has Current Assets of $1 112 000

question 59

Multiple Choice

A small company has current assets of $1 112 000 and current liabilities of $717 000. Which of the following statements about that company is most likely to be true?

• A)Since net working capital is nearly zero, the company is well run and will have little difficulty attracting investors.
• B)Since net working capital is negative, the company will not have enough funds to meet its obligations.
• C)Since net working capital is high, the company will likely have little difficulty meeting its obligations.
• D)Since net working capital is very high, the company will have ample money to invest after it meets its obligations.

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Definitions:

Stereotyping

The act of assuming that individuals or groups conform to generalized beliefs or characteristics, often leading to misjudgment and prejudice.

Intergroup Hostility

Negative attitudes and behaviors directed towards members of a different group, often stemming from prejudice or competition.

Cooperative Interdependence

A situation where individuals in a group rely on each other to achieve a common goal or a beneficial outcome.

Equal Status

The concept that individuals or groups are of the same standing or importance in social, legal, or ethical contexts.