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Which one of the following is a working capital management decision?
A. determining the amount of equipment needed to completeB. determining whether to pay cash for a purchase or use the credit offered by the supplierC. determining the amount of long-term debt required to complete a projectD. determining the number of shares of stock to issue to fund an acquisitionE. determining whether or not a project should be accepted

Answer :

Answer: Which one of the following is a working capital management decision? B. determining whether to pay cash for a purchase or use the credit offered by the supplier.

Explanation: Working capital refers to short-term assets and liability. When you are trying to figure out which payment type to use for the purchase, thinking about the long-term goal behind the purchase will help. This makes sure that the financial decision that is chosen is the best.

Histrionicus

The correct answer among the given options is - B. determining whether to pay cash for a purchase or use the credit offered by the supplier.

Working capital management refers to the management of current liabilities and assets to determine and confirm that the business has adequate liquidity.

  • The availability of short-term funds and liquidity of the business allows to determine whether to pay in cash or use the credit offered by the supplier, So, it is a working capital management decision.
  • Long-term debts are not current liabilities so other options are not capital management decisions

The correct answer is - option B.

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