A Company Is Considering Expanding Operations to Meet Growing Demand

question 21

Multiple Choice

A company is considering expanding operations to meet growing demand. With the capital expansion the working capital requirements are expected to change. Management expects cash to increase by £10,000, accounts receivable by £20,000, and inventories by £30,000. At the same time accounts payable will increase by £40,000, accruals by £30,000, and long- term debt by £80,000. The change in net working capital is

• A) a decrease of £10,000.
• B) an increase of £10,000.
• C) a decrease of £90,000.
• D) an increase of £80,000.

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Definitions:

Encoding

The initial process of converting information into a form that can be stored in memory, involving transforming sensory input into meaningful data.

Memory Consolidation

The process through which initial fragile memories are transformed into stable, long-term memories.

Encoding Specificity Principle

A principle stating that the recall of information is improved when the contexts present at encoding and at retrieval are the same.

Retrieval

Retrieval is the process of bringing information from stored memory back into conscious awareness, an essential part of the memory process in cognitive psychology.