What Is the Net Effect on a Firm's Working Capital

question 9

Multiple Choice

What is the net effect on a firm's working capital if a new project requires: $30,000 increase in inventory, $10,000 increase in accounts receivable, $25,000 increase in machinery, and a $20,000 increase in accounts payable?

• A)- $5,000
• B)+ $10,000
• C)+ $20,000
• D)+ $45,000 change in net working capital =

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Definitions:

Interest

A fee for the benefit of loaning money, usually stated as a yearly interest rate.

Payments

These are amounts paid or to be paid by one party to another in exchange for goods or services or as repayment of a loan.

Compounded Quarterly

Interest on an investment that is calculated four times a year.

Interest

Money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt.