Which One of the Following Statements Concerning Net Working Capital

question 27

Multiple Choice

Which one of the following statements concerning net working capital is correct?

• A)The lower the value of net working capital the greater the ability of a firm to meet its current obligations.
• B)An increase in net working capital must also increase current assets.
• C)Net working capital increases when inventory is sold for cash at a profit.
• D)Firms with equal amounts of net working capital are also equally liquid.
• E)Net working capital is a part of the operating cash flow.