Permanent net operating working capital reflects the fact that net operating working capital does not shrink to zero even when a business is at its seasonal or cyclical low.Thus,permanent net operating working capital represents a minimum level of net operating working capital that must be financed.

Question

Quizplus · Accepted Answer

Permanent net operating working capital is the minimum level of net operating working capital that a business must have even during its seasonal or cyclical low period. Thus, it is a permanent requirement for the business and should be financed accordingly. Therefore, the statement is true.

Permanent Net Operating Working Capital Reflects the Fact That Net