Quiz Questions

profileshotib

Can someone answer this question for me in 30 mins please. Write ansers in your own words, do not copy word for word on any websites. Thanks.

 

1) Whereas NPV is an absolute measure of an investment's value, the profitability index is a relative measure.

 

What exactly does this mean, can you expand on this a little?

 

2) In this case, current liabilities are fewer current assets and hence if the working capital structure remains unchanged, the working capital position of the firm must be increased and funded in accordance with revenue growth (Negative Working Capital and Positive Working Capital, 2015).

 

Where do most firms get this type of funding from?

 

3) Net Working capital can be positive or negative. Negative working capital means company has more current liabilities than current asset and lack funds necessary.

 

 

Which would firms prefer (positive or negative)?

 

    • 6 years ago
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