Joel's Shop Needs to Maintain 15% of Its Sales in Net

question 90

Multiple Choice

Joel's Shop needs to maintain 15% of its sales in net working capital. Joel's is considering a 4-year project which will increase sales from their current level of $130,000 to $150,000 the first year and to $165,000 a year for the following three years. What amount should be included in the project analysis for net working capital in year four of the project?

• A) -$19,500
• B) $0
• C) $5,250
• D) $7,000
• E) $24,750

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