Working capital:
A) Pays for long-term investments in fixed assets.
B) May be used to pay for new production facilities.
C) Pays for short-term expenses.
D) Is not needed on an ongoing basis.
E) None of these.

Question

Quizplus · Accepted Answer

Working capital is used to pay for short-term expenses such as inventory, wages, and accounts payable. It is not used for long-term investments in fixed assets or new production facilities. Working capital is necessary on an ongoing basis to keep a business operating smoothly and efficiently.

Working Capital