A firm has $680 in inventory, $2,140 in fixed assets, $210 in accounts receivables, $250 in accounts payable, and $80 in cash. What is the amount of the net working capital?
A) $970
B) $720
C) $640
D) $3,110
E) $2,860

Question

Quizplus · Accepted Answer

Net working capital is calculated by subtracting current liabilities from current assets. In this case, the current assets are $680 (inventory) + $210 (accounts receivables) + $80 (cash) = $970. The current liabilities are $250 (accounts payable). Therefore, net working capital = $970 - $250 = $720. The correct answer is B.

A Firm Has $680 in Inventory, $2,140 in Fixed Assets