Kay's Nautique Is Considering a Project Which Will Require Additional

question 293

Multiple Choice

Kay's Nautique is considering a project which will require additional inventory of $128,000 and will also increase accounts payable by $45,000 as suppliers are willing to finance part of these
Purchases. Accounts receivable are currently $80,000 and are expected to increase by 10% if this
Project is accepted. What is the initial project cash flow needed for net working capital?

• A) $75,000
• B) $91,000
• C) $99,000
• D) $136,000
• E) $181,000

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Definitions:

Land

In economics, it refers to all natural resources used to produce goods and services, including agricultural and undeveloped land.

Interest Rate

The cost of borrowing money or the reward for saving, usually expressed as a percentage of the principal amount per period.

$100

A monetary denomination or value equivalent to one hundred U.S. dollars.

Usury Laws

Regulations governing the maximum interest rates that can be charged on loans, intended to prevent excessive charges.