1. A firm with negative net working capital:

A. Is technically bankrupt

B. Has no cash on hand

C. Has more current liabilities than current assets D. Most likely will not run short of cash over the next six months

2. Relevant cash flows for a project are best described as: A. Incidental cash flows B. Incremental cash flows C. Sunk cash flows D. Accounting cash flows 3. In evaluating the initial investment for a capital budgeting project, A. An increase in net working capital is considered a cash flow B. A decrease in net working capital is considered a cash outflow C. An increase in net working capital is considered a cash outflow D. Networking capital does not have to be considered