Ski World Is Considering a New Product Line Which Will

question 21

Multiple Choice

Ski World is considering a new product line which will require additional inventory costing $146,000. Accounts payable will increase by $87,000 as suppliers are willing to finance a portion of these purchases. Accounts receivable are currently $80,000 and are expected to increase by 20% if this project is accepted. What is the initial net working capital requirement for the new product line?

• A) $43,000
• B) $75,000
• C) $108,000
• D) $162,000
• E) $249,000

---

Definitions:

Carboxylic Acid

Organic molecules that feature a carboxyl group (-COOH) are known for their acidic characteristics and are commonly found throughout the natural world.

Aldehyde

Organic compounds characterized by a carbon atom bonded to a hydrogen atom and double-bonded to an oxygen atom at the end of a carbon chain.

DIBAL

Diisobutylaluminum hydride, a reducing agent commonly used in organic synthesis to reduce esters, aldehydes, and ketones to alcohols.

Acid Chlorides

Reactive derivatives of carboxylic acids where the hydroxyl group has been replaced by a chloride ion, with general formula RCOCl.