Scrapping Products Is Implementing a Project That Will Initially Increase

question 26

Multiple Choice

Scrapping Products is implementing a project that will initially increase accounts payable by $3,000, increase inventory by $1,800, and decrease accounts receivable by $1,200.All net working capital will be recouped when the project terminates.What is the cash flow related to the net working capital for the last year of the project?

• A)$2,400
• B)$2,100
• C)-$2.400
• D)-$2,100
• E)$3,300

---

Definitions:

Dividend-payout Ratio

A financial ratio that shows the percentage of a company's earnings that is paid out to shareholders as dividends.

Anticipated Growth Rate

An expectation of the rate at which a company, asset, or economy will grow in a future period, often used in investment analysis.

Return On Equity

A measure of a corporation's profitability, indicating how much profit a company generates with the money shareholders have invested.

Dividend Per Share

The amount of dividend that a company pays out over a year divided by the total number of its outstanding shares.