A. This answer is incorrect. See the correct answer for a complete explanation.
B. This is best done by creating a simple example. Let us assume that now the company has current assets of $150 and current liabilities of $75. This gives it a working capital level of $75. If the current assets increase by $120 they will be $270. If current liabilities decrease by $50, they will be $25; this gives the company a working capital of $245. This is a $170 increase.
C. This answer is incorrect. See the correct answer for a complete explanation.
D. This answer is incorrect. See the correct answer for a complete explanation.
