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
E) Paying an accounts payable

Question

Quizplus · Accepted Answer

Paying a payment on a long-term debt will decrease the net working capital of a firm, as it involves the outflow of cash or other current assets. The other options listed either do not affect net working capital or increase it.

Which One of the Following Will Decrease the Net Working