Final answer:
Both temporary and permanent working capital tend to increase with firm growth.
Step-by-step explanation:
Both temporary working capital and permanent working capital tend to increase with the growth of the firm.
Temporary working capital refers to the additional capital needed to support short-term operations, such as inventory and accounts receivable, during periods of high sales or production. As a company grows, it may need to invest more in these areas to meet the demand.
Permanent working capital, on the other hand, includes the capital required for long-term assets like land, buildings, and equipment. As a firm expands, it may need to acquire more of these assets to support its operations.