Q202
Current assets are subtracted from current liabilities to calculate
A.
opportunity cost of capital
B.
working capital
AnswerC.
total long term assets
D.
weighted average cost of capital
Answer: Option B
Solution
Answer: Option B
Solution:
Current assets are subtracted from current liabilities to calculate working capital. Working capital, also known as net working capital (NWC), is the difference between a company's current assets, such as cash, accounts receivable (customers' unpaid bills) and inventories of raw materials and finished goods, and its current liabilities, such as accounts payable.