Answer (D) is correct . Net working capital equals current assets minus current liabilities. Refinancing a short-term note with a 2-year note payable decreases current liabilities, thus increasing working capital.
Answer (A) is incorrect because A cash payment of payroll taxes decreases current assets and current liabilities by equal amounts.
Answer (B) is incorrect because Buying a new plant with a 20-year mortgage has no effect on current assets or current liabilities.
Answer (C) is incorrect because Cash collection of an account receivable increases one current asset and decreases another by the same amount.
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