finance 311 exam 1

Wes Motors has total assets of $98,300, net working capital of $11,300, owner's equity of $41,600, and long-term debt of $38,600. What is the value of the current assets? $21,600 $18,100 $28,900 $29,400 $6,800

$29,400

Net working capital includes: *A land purchase *An invoice from a supplier. *Non-cash expenses. *Fixed asset depreciation. *The balance due on a 15-year mortgage.

**An invoice from a supplier.

Net working capital increases when: *Fixed assets are purchased for cash. *Inventory is purchased on credit. Inventory is sold at cost. A credit customer pays for his or her purchase. Inventory is sold at a profit.

A credit customer pays for his or her purchase.

Given a profitable firm, depreciation: Increases net income Increases net fixed assets Decreases net working capital Lowers taxes Has no effect on net income

Lowers taxes