Working capital represents assets that support day-to-day operating activities. Funding working capital requires:
A)a commitment of capital (money)for a short time, i.e. a time comparable to the period for which working capital assets are held.
B)a more or less permanent investment of funds to support ongoing daily operations.
C)a commitment to allocate funds annually from the firm's capital budget.
D)All of the above

Question

Quizplus · Accepted Answer

Working capital is essentially the funds used to manage daily operations and is considered a part of the company's operating capital. Therefore, it requires a more or less permanent investment of funds to support ongoing daily operations, rather than a short-term commitment or an annual allocation from the capital budget.

Working Capital Represents Assets That Support Day-To-Day Operating Activities