Question
How does the purchase of a new machinery to expand
production capacity impact the working capital of ABC Limited?Solution
Working capital = Current Assets – Current Liabilities. When a company purchases fixed assets like machinery, there are two possible scenarios: • Cash purchase → Cash (a current asset) decreases, which reduces working capital. • Credit purchase → Creditors (a current liability) increase, which also reduces working capital. Thus, in either case, the purchase of new machinery results in a reduction of working capital, even though it simultaneously increases the fixed assets and total assets of the company.
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Generous 'To decamp' would mean:
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The scientist made a crucial discovery in the field of medicine.
... In the following question select the answer pair that expresses a relationship most similar to that expressed in the capitalised pair.
AFFECTIO...
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PERSEVERANCE
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He was indifferent to the outcome of the game.
trickle
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Serene
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