Question
3. A small company has current assets of $125,000 and current liabilities of $185,000. Which of the following statements about that company is probably true?
3. A small company has current assets of $125,000 and current liabilities of $185,000. Which of the following statements about that company is probably true? A. Since net working capital is high, the company will likely have little difficulty meeting its obligations. B. Since net working capital is very high, the company will have ample money to invest after it meets its obligations. C. Since net working capital is negative, the company is well run. D. Since net working capital is negative, the company may not have enough funds to meet its obligations. E. Net working capital cannot be calculated for the small company.
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