Jones Company Has Cash of $20,000, Accounts Receivable of $30,000

question 139

Multiple Choice

Jones Company has cash of $20,000, accounts receivable of $30,000, inventory of $16,000, and equipment of $50,000. Assuming current liabilities of $24,000, this company's working capital is:

• A)$6,000.
• B)$26,000.
• C)$42,000.
• D)$72,000.

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Definitions:

Present Value

The value today of a sum of money or cash flows expected in the future, discounted by a specific rate of return.

Interest Rate

The percentage charged on a loan or paid on deposits over a specific period of time, reflecting the cost of borrowing or the return on savings.

Consumes

The act of using up a resource or goods in the process of satisfying human needs or wants.

Utility Function

A utility function is a mathematical representation that assigns a level of utility or satisfaction to combinations of goods and services consumed.