Diswo Inc Needs to Maintain 15% of Its Sales in Net

question 71

Multiple Choice

Diswo Inc. needs to maintain 15% of its sales in net working capital. Lottie's is considering a 3-year project which will increase sales from their current level of $110,000 to $135,000 the first year and $145,000 a year for the following two years. What amount should be included in the project analysis for the last year of the project in regards to the net working capital?

• A) -$35,000
• B) -$5,250
• C) $0
• D) $5,250
• E) $35,000

---

Definitions:

Exponential Density Function

A probability density function used to model the time between events in a process where events occur continuously and independently at a constant average rate.

Density Function

A mathematical function that describes the probability distribution of a continuous random variable, indicating the likelihood of a variable taking on a particular value.

Exponential Distribution

A probability distribution used to model the time between events in a process where events occur continuously and independently at a constant rate.

Parameter

A measurable feature or characteristic that helps to define or classify a system, often a constant in mathematical models and statistical analyses.