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.

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

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