Question: The change in net working capital when evaluating a capital budgeting decision is the change in current liabilities minus the change in current assets the

The change in net working capital when evaluating a capital budgeting decision is

the change in current liabilities minus the change in current assets

the increase in current assets

the increase in current liabilities

the change in current assets minus the change in current liabilities

A firm is evaluating a proposal which has an initial investment of $50,000 and has cash flows of $15,000 per year for five years. The payback period of the project is

1.5 years

2 years

3.3 years

4 years

In working capital management, risk is measured by the probability that a firm will become

liquid

technically insolvent

unable to meet long-term obligations

less profitable

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