Dollar Diamond Is Considering a Project Which Will Require Additional

question 156

Multiple Choice

Dollar Diamond is considering a project which will require additional inventory of $134,000 and will also increase accounts payable by $37,000 as suppliers are willing to finance part of these purchases. Accounts receivable are currently $100,000 and are expected to increase by 8% if this project is accepted. What is the initial project cash flow related to net working capital?

• A) -$105,000
• B) -$97,000
• C) -$89,000
• D) $8,560
• E) $94,720

---

Definitions:

Immutable

Something that is unchangeable or unable to be altered over time.

Fluid Intelligence

The ability to solve new problems, use logic in new situations, and identify patterns without relying on pre-existing knowledge.

Crystallized Intelligence

A form of intelligence that involves the ability to use knowledge, experience, and skills that one has acquired over a lifetime.

Poverty

The state of having insufficient financial resources to meet basic living expenses like food, housing, and healthcare.