Which One of the Following Will Increase the Net Working

question 2

Multiple Choice

Which one of the following will increase the net working capital of a firm? Assume the current ratio is positive.

• A)Selling a fixed asset
• B)Selling inventory at cost for cash
• C)Making a payment on a long-term debt
• D)Buying inventory on credit
• E)Paying an accounts payable

---

Definitions:

Elastic Supply

The responsiveness of the quantity supplied of a good or service to a change in its price, with a high elasticity indicating that supply can adjust quickly to price changes.

Subsidy

A financial contribution provided by the government to support or promote a particular economic activity or sector.

Elastic Demand

A market condition where the demand for a product changes significantly in response to changes in price.

Inelastic Supply

Refers to a market scenario where the quantity supplied does not change significantly when the price of the product changes.