Which of the following expenses involves the working capital a company needs for operation?
A) The money required to purchase land in order to set up a plant
B) The money required to purchase equipment necessary to begin operations
C) The money required to pay the salary of employees
D) The money required to acquire a competing firm
E) The money required to set up the power grid for a new manufacturing plant

Question

Quizplus · Accepted Answer

Working capital refers to the funds a company needs for day-to-day operations, such as paying salaries, purchasing raw materials, and meeting other short-term expenses. Choices A, B, D and E are all capital expenditures which involve long-term investments in assets that are not directly related to ongoing operations or day-to-day expenses.

Which of the Following Expenses Involves the Working Capital a Company