Jeff's Stereo Sound Is Expanding Its Product Offerings to Reach

question 61

Multiple Choice

Jeff's Stereo Sound is expanding its product offerings to reach a wider range of customers.The expansion project includes increasing the floor inventory by €150,000 and increasing its debt to
Suppliers by 50% of that amount.The company will also spend €200,000 for a building contractor
To expand the size of the showroom.As part of the expansion plan, the company will be offering
Credit to its customers and thus expects trade receivables to rise by €25,000.For the project
Analysis, what amount should be used as the initial cash flow for net working capital?

• A)€75,000
• B)€100,000
• C)€125,000
• D)€150,000
• E)€175,000

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Definitions:

Uncertainty

The state of having limited knowledge, making it impossible to precisely predict the future or outcomes.

Confidence

Confidence is the belief in one's abilities and qualities, fostering a positive self-perception and courage to face challenges.

Information-Processing Styles

The different ways individuals process and interpret information, reflecting variations in thinking and learning.

Nearsighted and Farsighted

Describes perspectives where nearsighted is focused on immediate details and farsighted on long-term outcomes and contexts.