Question

Which one of the following is a working capital management decision? Select one: a. What type(s) of equipment is (are) needed to complete a current project? b. Should the firm pay cash for a purchase or use the credit offered by the supplier? c. What amount of long-term debt is required to complete a project? d. How many shares of stock should the firm issue to fund an acquisition? e. Should a project should be accepted?

Answer 1

Answer:

b. Should the firm pay cash for a purchase or use the credit offered by the supplier?

Explanation:

Working capital decision is the decision which includes the cash, Account receivable, Account payable, the portion of debt payable within one year. Decision related to supplier is actually related to account payable. so this is the working capital decision. Other decision involves fixed assets, long term debt, investments and projects under consideration.

Answer 2

The choices such as types of equipment needed to complete a current project, whether the firm should pay by cash or credit for the current project and whether the project should be accepted.

Also, the number of shares required by the firm to fund an acquisition refers to as a part of working capital management of a firm. So, the correct options are A, B, D and E.

• The working capital refers to such capital which is required for the functioning of a business and are planned for a relatively less period of time compared to fixed capital.

• The benefits of working capital are generally derived within the year of operation itself and do not stay in the business organization for a longer period of time.

• Working capital management is apart of decision making whether the resources available with the organization are capable enough to meet the production, manufacturing or distribution of goods and services.

• An example can be a firm requiring raw material for the production of its goods and allocation of funds and resources and manpower to the best effect to achieve optimum utilization of such resources.

Hence, the correct alternatives of working capital management decision are as mentioned under A, B, D and E above.

To know more about Working Capital Management, click the link below.

https://brainly.com/question/7150989