Which of the following statements is not true?
A) Net working capital is the difference between short-term assets and short term liabilities.
B) Short-term financing deals with the management of short-term liabilities and short-term assets.
C) Short-term financing is concerned with determining reasonable amounts of cash to hold, which customers should get credit and others related issues.
D) Net working capital does not utilize the concept of present value since all flows are short-term.

Question

Quizplus · Accepted Answer

Net working capital does consider the time value of money indirectly through the management of current assets and liabilities, even though the primary calculations do not explicitly use present value formulas. The statement that it does not utilize the concept of present value is not accurate, as effective working capital management involves understanding the timing of cash flows, which is inherently related to the concept of the time value of money.

Which of the Following Statements Is Not True