Jim's Hardware Is Adding a New Product to Its Sales

question 37

Multiple Choice

Jim's Hardware is adding a new product to its sales lineup.Initially, the firm will stock $36,000 of the new inventory, which will be purchased on 30 days' credit from a supplier.The firm will also invest $13,000 in accounts receivable and $11,000 in equipment.What amount should be included in the initial project costs for net working capital?

• A)-$49,000
• B)-$47,000
• C)-$3,000
• D)-$13,000
• E)-$24,000

---

Definitions:

Term to Maturity

The remaining time until a financial instrument's principal amount is due to be repaid.

Net Basis

A method of reporting income and expenses where they are netted against each other, showing only the net amount instead of reporting them separately.

Cash Receipts

Money received by a business, typically documented during the accounting period in which it is received.

Turnover Quick

A measure reflecting the speed at which a company can convert its inventory or assets into sales or revenue, indicating operational efficiency.