Working capital to support the demands of a new project must be funded with cash. The assets primarily associated with such working capital requirements include:
A)machinery and equipment.
B)inventory and accounts receivable.
C)land and buildings.
D)All of the above

Question

Quizplus · Accepted Answer

Working capital is the current assets minus current liabilities that are required to support day-to-day operations of a business. For a new project, the demand for inventory and accounts receivable is likely to increase, which requires funding to ensure adequate cash flow to support these assets. Machinery and equipment or land and buildings are long-term assets that are not typically associated with working capital.

Working Capital to Support the Demands of a New Project