The Above Diagram Shows a Balance Sheet for a Certain

question 25

Multiple Choice

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) -$12 million
• B) $12 million
• C) -$24 million
• D) $24 million

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Definitions:

Non-Operating Sources

Revenue or income that arises from activities not related to a company’s core business operations.

Discontinued Operations

Parts of a company's core business or product lines that have been sold, disposed of, or discontinued.

FVTPL

The acronym stands for Fair Value Through Profit or Loss; this designation refers to financial assets or liabilities that are recorded at fair value, with any changes directly affecting profit or loss.

Fair Value

An estimate of the price at which an asset or liability could be traded in a fair transaction between willing parties, other than in a forced or liquidation sale.