Which of the Following Statements Is NOT True

question 63

Multiple Choice

Which of the following statements is NOT true?

• A) Gross working capital refers to the funds invested in a company's current liabilities.
• B) Net working capital (NWC) refers to the difference between current assets and current liabilities.
• C) Working capital efficiency refers to the length of time between when a working capital asset is acquired and when it is converted into cash.
• D) Working capital management involves making decisions regarding the use and sources of current assets.

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Definitions:

New System Alternative

A proposed solution or technology that aims to replace or improve upon an existing system.

Net Present Value

The difference between the present value of cash inflows and outflows over a period, used to assess the profitability of investments.

Present Value

The current value of a future sum of money or stream of cash flows given a specified rate of return, accounting for time value of money.

Annual Cost Savings

The reduction in costs achieved during a specific year, often through efficiency improvements or expense cuts.