A Firm Is Considering Changing Their Credit Terms

question 40

Multiple Choice

A firm is considering changing their credit terms.It is estimated that this change would result in sales increasing by $1,000,000.This in turn would cause inventory to increase by $150,000,accounts receivable to increase by $100,000,and accounts payable to increase by $75,000.What is the firm's expected change in net working capital?

• A)$1,175,000
• B)$325,000
• C)$250,000
• D)$175,000
• E)$150,000

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