Which of the following transactions would cause a firm’s working capital to increase? a. Pay out...

Which of the following transactions would cause a firm’s working capital to increase?

a. Pay out $2 million cash dividend.

b. Receive $2,500 from a customer who pays a bill resulting from a previous sale.

c. Pay $5,000 previously owed to one of its suppliers.

d. Borrow $1 million long-term and invest the proceeds in inventory.

e. Borrow $1 million short-term and invest the proceeds in inventory.

f. Sell $5 million of marketable securities for cash.

Solutions

Expert Solution

Option D is correct

Borrow $1 million long-term and invest the proceeds in inventory

By borrowing in long term, and increasing inventory increases current assets

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

Which of the following would cause a firm’s EPS to increase? a A firm choosing to...

Which of the following would cause a firm’s EPS to increase? a A firm choosing to use lots of unskilled labour instead of buying a piece of factory machinery. b A firm buying back a portion of its outstanding common shares. c A firm increasing its preferred share dividends. d A portion of a firm’s convertible bondholders converting their bonds into common shares.

1. Which of the following would cause an increase in the market supply of accountants (increase...

1. Which of the following would cause an increase in the market supply of accountants (increase labor supply curve) Select one: a. an increase in wages offered to tax attorneys (an occupation alternative to accounting) b. an increase the in value of the marginal product of accountants. c. a decrease in wages offered to tax attorneys (an occupation alternative to accounting) d. stricter qualifications needed to be a certified public accountant (CPA) 2. Value of the marginal product of labor...

1. Which of the following changes in working capital will result in an increase in cash...

1. Which of the following changes in working capital will result in an increase in cash flows? a. increase in account payable b. increase in inventories c. decrease in current liabilities d. increase in accounts receivable 2. Which of the following will occur in a statement of cash flows as a result of paying cash dividends? a. Cash flows from operations will increase. b. Cash flows from investments will decrease. c. Cash flows from the financing will decrease. d. Cash...

Which of the following would cause a definite leftward shift of the supply curve? an increase...

Which of the following would cause a definite leftward shift of the supply curve? an increase in the cost of an input and an expectation by firms of a lower price an increase in the price of a complement in production and a decrease in the cost of an input an increase in taxes and an increase in the number of firms an increase in the price of a substitute in production and a decrease in productivity

Which of the following errors would cause the trial balance to be out of balance? A.The...

Which of the following errors would cause the trial balance to be out of balance? A.The payment of an account payable for $200 was recorded as a debit to Accounts Payable for $200 and a credit to Cash for $2,000. B.The payment of an account payable for$400 was recorded as a debit to Cash, $400,and a credit to Accounts Payable, $400. C.The payment of utilities expense was recorded as a debit to Rent Expense for $77and a credit to Cash...

Which of the following conditions would cause the break-even point to increase? a.Total fixed costs increase...

Which of the following conditions would cause the break-even point to increase? a.Total fixed costs increase b.Unit variable cost decreases c.Total fixed costs decrease d.Unit selling price increases

14) An increase in the money supply will cause an increase in which of the following...

14) An increase in the money supply will cause an increase in which of the following variables? A) output B) investment C) consumption D) all of the above E) none of the above 15) An increase in the money supply must cause which of the following? A) a leftward shift in the IS curve B) a reduction in the interest rate and ambiguous effects on investment C) an increase in investment and a rightward shift in the IS curve D)...

Which one of the following will increase net working capital? Multiple Choice A decrease in cash....

Which one of the following will increase net working capital? Multiple Choice A decrease in cash. An increase in accounts payable. An increase in depreciation. A profitable sale of inventory. The write-off of a bad debt.

Which of the following would cause the demand curve of iPhones to increase (i.e. shift)? Assume...

Which of the following would cause the demand curve of iPhones to increase (i.e. shift)? Assume that iPhones are a normal good. A decrease in the cost of glass screens used to make smart phones An increase in Samsung Galaxy prices, where Samsung Galaxy is a substitute for iPhones. A decrease in the level of incomes for the average household An increase in the supply for iPhones

1. Which of the following choices would cause the greatest increase in GFR? Show your work. a. 10% increase...

1. Which of the following choices would cause the greatest increase in GFR? Show your work. a. 10% increase in glomerular blood hydrostatic pressure (BHP) b. 50% decrease in capsular hydrostatic pressure (CHP) c. 50 decrease in blood colloid osmotic pressure (BCOP) d. 50% constriction of both the afferent and efferent arterioles 2. For each of the cases below, indicate whether there is an alkalosis or acidosis present. For each case, indicate whether the cause is metabolic or respiratory. For each case, indicate whether the condition...

Subjects