A New Project Would Require an Immediate Increase in Raw

question 66

Multiple Choice

A new project would require an immediate increase in raw materials in the amount $17,000. The firm expects that accounts payable will automatically increase $7,000. How much must the firm expect its investment in net working capital to increase if they accept this project?

• A) $17,000
• B) $7,000
• C) $10,000
• D) $24,000

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Definitions:

Voting Shares

Shares that give the shareholder the right to vote on matters of corporate policy and the election of the board of directors.

Board of Directors

A group of individuals elected by shareholders to oversee the management and make strategic decisions for a corporation.

Shareholder Rights

The entitlements granted to shareholders of a corporation, including the right to vote on corporate matters, receive dividends, and share in the assets upon dissolution.

Proposed Merger

A plan or offer to combine two or more companies into one entity, subject to approval by regulators and shareholders.