Which one of the following will decrease the net working capital of a ﬁrm? Assume that the current ratio is greater than 1.0.
A)Selling inventory at a proﬁt.
B)Collecting a trade receivables.
C)Paying a payment on a long-term debt.
D)Selling a ﬁxed asset for book value.
E)Paying a trade payables.

Question

Quizplus · Accepted Answer

Paying off a long-term debt will decrease the net working capital of a firm as it involves an outflow of cash.

Which One of the Following Will Decrease the Net Working