Final answer:
Working capital management involves managing short-term assets and liabilities to ensure liquidity. Out of the given options, determining which customers will be granted credit (C) is related to working capital management. This affects accounts receivable and thus the working capital.
Step-by-step explanation:
Understanding Working Capital Management
Working capital management is a critical aspect of a firm's overall financial strategy. It involves managing the firm's current assets and current liabilities to maintain sufficient cash flow for its operations. When we examine the components of working capital management, we find activities such as:
- Determining credit terms for customers
- Deciding on inventory levels
- Managing cash and cash equivalents
Given the options presented in the question, the activity that relates to working capital management is determining which customers will be granted credit (C). This is because offering credit terms to customers directly affects accounts receivable, a significant component of current assets, and by extension, working capital. The other options, such as deciding which projects to accept, choosing between purchasing or repairing equipment, issuing new shares of stock, and establishing target debt-equity ratios, are more closely related to capital budgeting and long-term financial planning.
The final answer to the student's question regarding working capital management is option C.