Holding All Other Variables Constant, Which of the Following Would

question 34

Multiple Choice

Holding all other variables constant, which of the following would INCREASE net working capital for given year on a project?

• A) Allowing customers less time to pay for purchases
• B) Taking longer to pay suppliers
• C) Increasing inventory levels
• D) Both A and C

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Definitions:

Prime Costs

The direct costs of production, typically consisting of direct materials and direct labor.

Indirect Labour

Workers in a manufacturing process whose activities are not directly related to the production of specific goods or services, such as maintenance staff and managers.

Cost of Goods Purchased

The total expense for raw materials and goods acquired for resale by a company during a specific period, excluding any indirect costs.

Transportation Inward

Costs incurred to bring materials to a business, often included as part of inventory costs.