CAF-7 · Chapter 12 · Question 8 of 15
Which of the following factors is LEAST likely to influence the required level of working capital investment in a company?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) The depreciation method used for valuing the company's factory machinery
Explanation
Depreciation is a non-cash expense related to long-term non-current assets. It has absolutely no direct impact on the day-to-day cash flows or the short-term working capital cycle (inventory, receivables, payables) of the business.
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