Sales for Year 2 of the New Project Are Expected

question 4

Multiple Choice

Sales for year 2 of the new project are expected to increase by 10%. Current assets are expected to increase by 17% for every dollar increase in sales while accounts payable are expected to increase by 6%. For year 2 the change in cash flows due to working capital will be:

• A) +10% of sales.
• B) -10% of sales.
• C) +1.1% of sales.
• D) -1.1% of sales.

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Definitions:

Lordosis

The inward curvature of a portion of the lumbar and cervical vertebral column, which can become exaggerated in certain medical conditions.

High Heels

Shoes with raised heels which elevate the wearer's feet significantly higher than their toes.

NSAIDs

Nonsteroidal anti-inflammatory drugs, a class of medications that reduce pain, decrease fever, prevent blood clots, and in higher doses, decrease inflammation.

Collarbone

A long, flat bone located horizontally across the upper part of the chest in humans and some animals, also known as the clavicle, serving as a strut between the shoulder blade and the sternum.