Working Capital Paper 1

1

Net working capital is the difference between






2

Determining the appropriate level of working capital for a firm requires






3

Determining the appropriate level of working capital for a firm requires






4

All of the following statements in regard to working capital are true except






5

During the year, Mason Company’s current assets increased by $120,000, current liabilities decreased by $50,000, and net working capital






6

Mason Company’s board of directors has determined 4 options to increase working capital next year. Option 1 is to increase current assets by $120 and decrease current liabilities by $50. Option 2 is to increase current assets by $180 and increase current liabilities by $30. Option 3 is to decrease current assets by $140 and increase current liabilities by $20. Option 4 is to decrease current assets by $100 and decrease current liabilities by $75. Which option should Mason choose to maximize net working capital?






7

Which one of the following would increase the net working capital of a firm?






8

Since Marsh, Inc., is experiencing a sharp increase in sales activity and a steady increase in production, the management of Marsh has adopted an aggressive working capital policy. Therefore, the company’s current level of net working capital






9

As a company becomes more conservative in its working capital policy, it would tend to have a(n)






10

As a company becomes more conservative with respect to working capital policy, it would tend to have a(n)






Result

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Correct Answers:
Wrong Answers:
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