30.1

a. This transaction merely substitutes one current liability (short-term debt) for another

(accounts payable). Neither cash nor net working capital is affected.

b. This transaction will increase inventory at the expense of cash. Cash falls, but net working capital is unaffected.

c. The firm will use cash to buy back the stock. Both cash and net working capital will fall.

d. The proceeds from the sale will increase both cash and net working capital.