1. Working capital is equal to the firm's current assets, whereas net operating working capital is equal to current assets minus the difference between current liabilities and notes payable. This assumes that all current assets are used in the firm's normal operations. True or false?
2. Unlike bank loans and costly trade credit, accruals are typically considered to have a zero cost. True or false?
3 When a firm borrows on a short-term basis from a bank, which of the following instruments would be used to state the terms and conditions involved with the debt?
a. Certificate of indebtedness
b. Promissory note
c. Mortgage bond
d. Credit line