Which one of the following will decrease the net working capital of a firm? Assume that the current ratio is greater than 1.0.
A) Selling inventory at a profit.
B) Collecting an accounts receivable.
C) Paying a payment on a long-term debt.
D) Selling a fixed asset for book value.

Question

Quizplus · Accepted Answer

Paying off a long-term debt with cash reduces current assets without affecting current liabilities, thus decreasing net working capital.

Which One of the Following Will Decrease the Net Working