A New Project Requires an Increase in Both Current Assets

question 62

Multiple Choice

A new project requires an increase in both current assets and current liabilities of $125,000 each.What is the overall impact on net working capital investment?

• A)an increase of zero.
• B)an increase of $125,000.
• C)an increase of $250,000.
• D)an increase of $62,500, when averaged over the life of the project.

Familiarize with concepts of group technology and its benefits like reduced setup times and improvement in production processes.

Recognize the importance of rapid product development and strategies to achieve it, such as time-based competition.

Understand the environmental considerations in product design and the rise of environmental awareness.

Grasp the concept of system perspective in product design management and the need to view products in terms of their overall impact.

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Definitions:

Individual Pays

A principle where the cost of a service or good is borne by the individual who consumes or uses it, rather than by society or an organization.

Aggregate Demand Curve

Describes the buying behavior of a group of consumers. We add up all the individual demand curves to get an aggregate demand curve (the relationship between the price and the number of purchases made by a group of consumers).

Total Demand

Represents the entire quantity of a certain product or service that consumers in a market are willing and able to purchase at a given price level.

Market

A physical or virtual space where buyers and sellers interact to exchange goods, services, or information.