Whenever a new product competes against a company’s already existing p

Whenever a new product competes against a company’s already existing products and reduces the sales of the other products, net working capital increases occur.

Indicate whether the statement is true or false.

ANSWER

Answer: FALSE
Explanation: Whenever a new product competes against a company’s already existing products and reduces the sales of these other products, EROSION OCCURS. If sales decrease, then it is more likely that there will be a decrease in net working capital (as opposed to an increase).