All of the Following Are Anticipated Effects of a Proposed

question 41

Multiple Choice

All of the following are anticipated effects of a proposed project.Which of these should be included in the initial project cash flow related to net working capital?
I.An inventory decrease of €5,000.
II.An increase in trade receivables of €1,500.
III.An increase in non-current assets of €7,600.
IV.A decrease in trade payables of €2,100.

• A)I and II only.
• B)I and III only.
• C)II and IV only.
• D)I, II, and IV only.
• E)I, II, III, and IV.

---

Definitions:

Current Assets

Resources anticipated to be turned into cash, used up, or sold within a period of one year or across the business's operating cycle, depending on which period extends further.

Current Ratio

A financial metric indicating how well a company can cover its short-term liabilities with assets that can be quickly converted into cash within a year.

Current Liabilities

Financial obligations or debts that a company is required to pay within a year.

Accounts Payable

The amount of money a company owes to its suppliers or creditors for goods or services received.