A company that borrows $1 million short term and invests the proceeds in inventory will see its cash position unchanged.

Name: A company that borrows $1 million short term and invests the proceeds in inventory will see its cash position unchanged.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The company's cash position will remain unchanged because the money borrowed will be used to purchase inventory, which is an asset. The company will not have any additional cash on hand.

A Company That Borrows $1 Million Short Term and Invests