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    Question

    Using the same data, what is the Long Term Funds to

    Fixed Assets position?
    A Adequate margin for WC Correct Answer Incorrect Answer
    B Partial diversion of WC Correct Answer Incorrect Answer
    C Complete diversion of WC Correct Answer Incorrect Answer
    D Excess idle funds Correct Answer Incorrect Answer
    E Negative net worth Correct Answer Incorrect Answer

    Solution

    Long Term Funds = Equity + Reserves + Term Loan = 60 + 40 + 120 = 220 Fixed Assets = 180 → surplus 40 for WC, healthy.

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