Nu Look Needs to Maintain 15% of Its Sales in Net

question 144

Multiple Choice

Nu Look needs to maintain 15% of its sales in net working capital. The store manager is considering a 3-year project which is expected to increase sales from the current level of $1.1 million to $1.3
Million the first year and $1.5 million a year for the following two years. What amount should be
Included in the project analysis as the net working capital cash flow for year 3? Assume that all
Accounts are restored to their original values at the end of year 3.

• A) -$20,000
• B) $0
• C) $20,000
• D) $30,000
• E) $60,000

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Definitions:

Object-Relations Analyst

A psychoanalytic therapist who focuses on studying and treating the way individuals relate to others and objects based on early childhood experiences.

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A person who prioritizes independence and self-reliance, often valuing personal freedom and achievement over collective goals.

Collectivist

A cultural orientation that emphasizes the group over the individual, prioritizing group goals over personal goals.