A New Project Will Cause Accounts Payable to Increase by $35,000

question 320

Multiple Choice

A new project will cause accounts payable to increase by $35,000, accounts receivable to increase by $40,000 and inventory to decrease by $5,000 Which one of the following statements is true?

• A) The project will not affect net working capital.
• B) The change in accounts payable is a use of cash.
• C) The change in inventory is a use of cash.
• D) The project will decrease the amount of cash provided to customers.
• E) Net working capital will decrease.

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