You Are Considering Adding a Microbrewery on to One of Your

question 33

Multiple Choice

You are considering adding a microbrewery on to one of your firm's existing restaurants.This will entail an increase in inventory of $8000,an increase in accounts payable of $2500,and an increase in property,plant,and equipment of $40,000.All other accounts will remain unchanged.The change in net working capital resulting from the addition of the microbrewery is:

• A)$45,500.
• B)$10,500.
• C)$6500.
• D)$5500.

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Definitions:

Fixed Assets

Long-term tangible assets used in the operation of a business that are not expected to be consumed or converted into cash within a year.

Operating Capacity

Operating capacity refers to the maximum output that a company can produce using its available resources, under given conditions, over a certain period.

Sales Increase

A situation where the number or volume of products or services sold by a company rises during a specific period, indicating growth or demand.

Accounts Receivable

Funds that customers owe to a business for goods or services already provided but not yet compensated for.