Net Working Capital Assignment


Net Working Capital Assignment

1. When a firm issues (creates and sells) financial assets:

a) Money is transferred from investors to the firm.

b) Risk is transferred from the firm to the investors.

c) The firm sells claims on its real assets and on the cash those assets will generate.

d) All of the above.

2. The cash required for Net Working Capital in an investment project

a) Comprises the cost of the raw materials included in the expected annual sales.

b) Comprises the cost of the raw materials included in the new expected inventories.

c) Is the difference between a company’s current assets and current liabilities on its balance-sheet.

d) All of the above.

3. You spent 500 last week fixing your car’s engine. Now, the brakes are acting up and you are trying to decide whether to fix them or trade the car in for a newer model. In analyzing the investment project on a new car, the 500e you spent fixing the transmission is a(n)

a) Opportunity b) Fixed c) Incremental d) Sunk

4. Which of the following cash flows should be included in the analysis of a project? I. sinergies; II opportunity costs; III. erosion costs; IV. incremental costs:

a) I and II only

b) III and IV only

c) II, III, and IV only

d) I, II, III and IV. Get Finance homework help today

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