11. Which one of the following is included in net working capital? A. Land B. Ac

Question

11. Which one of the following is included in net working capital? A. Land B. Accounts payable C. Equipment D. Depreciation E. Dividend 12. Over the past year, a firm decreased its current assets and increased its current liabilities. As a result, the firm's net working capital: A. had to increase. B. had to decrease. C. could have remained constant if the amount of the decrease in current assets equaled the amount of the increase in current liabilities. D. could have either increased, decreased, or remained constant. E. was unaffected as the changes occurred in the firm's current accounts. 13. Which one of the following statements is correct? A. Shareholders' equity is the residual value of a firm. B. Net working capital must be a positive value. C. An increase in cash reduces the liquidity of a firm. D. Equipment is generally considered a highly liquid asset. E. Depreciation increases total assets. 14. All else equal, an increase in which one of the following will decrease owners' equity? A. Increase in inventory B. Increase in accounts payable C. Increase in accounts receivable D. Increase in net working capital E. Increase in net fixed assets 15. Highly liquid assets: A. increase the probability a firm will face financial distress. B. appear on the right side of a balance sheet. C. generally produce a high rate of return. D. can be sold quickly at close to full value. E. include all intangible assets. 16. Financial leverage: A. increases as the net working capital increases. B. is equal to the market value of a firm divided by the firm's book value. C. is inversely related to the level of debt. D. is the ratio of a firm's revenues to its fixed expenses. E. increases the potential return to the shareholders. 17. Which one of the following statements concerning market and book values is correct? A. The market value of accounts receivable is generally higher than the book value of those receivables. B. The market value tends to provide a better guide to the actual worth of an asset than does the book value. C. The market value of fixed assets will always exceed the book value of those assets. D. Book values represent the amount of cash that will be received if an asset is sold. E. The current book value of equipment purchased last year is equal to the initial cost of the equipment. 18. The market value of a firm's fixed assets: A. must exceed the book value of those assets. B. is more predictable than the book value of those assets. C. in addition to the firm's net working capital reflects the true value of a firm. D. is decreased annually by the depreciation expense. E. is equal to the estimated current cash value of those assets. 19. Which one of the following statements is correct concerning a firm's fixed assets? A. The market value is the expected selling price in today's economy. B. The market value is affected by the accounting method selected. C. The market value is equal to the initial cost minus the depreciation to date. D. The book value is equal to the market value minus the accumulated depreciation. E. The book value is the greater of the initial cost or the current market value. 20. An increase in which one of the following will increase net income? A. Fixed costs B. Depreciation C. Marginal tax rate D. Revenue E. Dividends

Explanation / Answer

11. answer accounts payable

Net Working capital= Current Assets- Current Liabilities

Accounts payable is a current liability

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