Flum Packages, Inc -If the Firm Was to Shift $2,000 of Current Liabilities

Multiple Choice

Flum Packages, Inc.

$\begin{array}{lrlr}\text { Assets }&&\text { Liabilities \& Equity }\\\hline \text { Current assets } & \$ 10,000 & \text { Current Liabilities } & \$ 5,000 \\\text { Fixed assets } & 20,000 & \text { Long-term debt } & 12,000 \\& & \text { Equity } & 13,000\\&----&&---\\\text { Total }&\$30,000&\text { Total }&\$30,000\\\end{array}$
-If the firm was to shift $2,000 of current liabilities to long-term funds, the firm's net working capital would_________the annual cost of financing would_________, and the risk of technical insolvency would_________, respectively.

A) decrease; decrease; increase
B) increase; increase; decrease
C) increase; decrease; decrease
D) decrease; increase; decrease