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

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Definitions:

Price

The amount of money or goods required to purchase a product or service.

Pure Monopolist

A market structure where a single seller controls the entire market supply of a product or service with no close substitutes, allowing them to set prices.

Monopoly Price

The price set by a monopoly, typically higher than in competitive markets, due to the absence of competition.

Economic Profits

Profits exceeding the opportunity costs of all resources used, indicating a return above the normal competition level.