Question

Help Sev Marianne is confused as to why you spend so much time worrying about net working capital. You explain to her that her networking capital will decrease if she starts: Multiple Choice Selling inventory at a loss. O Depreciating an asset. O Collecting an accounts receivat O Purchasing inventory on credit. Using cash to pay a supplier. Usina cas Prey 6 of 36 !!! Next >

Answer 1

Net Working Capital will decrease if she starts "Selling Inventory at a loss", because selling Inventory will reduce Inventory more than cash received. Hence, the above transaction will reduce Current Assets which results in decrease in Net Working Capital.