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Question: Working capital management...?

(Posted by: Just Amy on 2009-11-17 07:54:27)

Indicate how each of the following six different transactions that Dynamic Mattress might make would affect (i) cash and (ii) net working capital: a. Paying out a $2 million cash dividend. b. A customer paying a $2, 500 bill resulting from a previous sale. c. Paying $5, 000 previously owed to one of its suppliers. d. Borrowing $1 million long- term and investing the proceeds in inventory. e. Borrowing $1 million short- term and investing the proceeds in inventory. f. Selling $5 million of marketable securities for cash.

Posted by: Adorexic on 2009-11-17, 08:23:06

A. decrease in cash / no effect on working capital b. increase in cash / no effect on working capital c. decrease in cash / no effect on working capital d. no effect on cash / no effect on working capital e. no effect on cash / decrease in working capital f. increase in cash / no effect on working capital