Question

Working capltal management decisions Include determining: A. the minimum level of cash to be kept In a checking account. B. the best method of producing a product. C. the number of employees needed to work during a particular shift. D. when to replace obsolete equipment. E. If a competitor should be acquired.

Answer 1

Working capital management involves decisions about balancing assets and liabilities, such as choosing the minimum level of cash to keep in a checking account to maintain liquidity and meet short-term obligations.

Step-by-step explanation:

Working capltal management decisions include determining the appropriate levels and forms of assets and liabilities required to efficiently run a business's operations. Such decisions are crucial for maintaining a company's liquidity and ensuring its ability to meet short-term obligations. The correct answer to the question is A: the minimum level of cash to be kept in a checking account. This involves determining optimal cash reserves that allow for routine transactional purposes and unforeseen expenditures without keeping excessive amounts idle.

Firms raise the financial capital necessary for longer-term investments, which include purchasing machinery, building new plants, or initiating research and development projects, using methods such as sourcing from early-stage investors, reinvesting profits, borrowing, or selling stock. These decisions require careful analysis and strategic planning to ensure that the chosen financial capital sources are cost-effective and align with the company's goals.