EBK FUNDAMENTALS OF CORPORATE FINANCE
3rd Edition
ISBN: 9780133762808
Author: Harford
Publisher: PEARSON CUSTOM PUB.(CONSIGNMENT)
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Chapter 20, Problem 3P
Summary Introduction
Permanent working capital: Permanent working capital is the minimum level of investment that a firm requires in working capital. To maintain continuous operations a firm should keep this minimum amount invested in its short term assets.
Temporary working capital: Temporary working capital is the difference between a firm’s permanent working capital requirement and the firms actual level of investment in short term.
To determine:
The need of permanent working capital and temporary working capital of a company.
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Chapter 20 Solutions
EBK FUNDAMENTALS OF CORPORATE FINANCE
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