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

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Definitions:

Resource Allocation

Resource allocation involves the distribution of resources among competing groups or interests, a critical process in economics, business, project management, and within societies at large.

Peasants

Individuals engaged in small-scale agriculture or rural farming communities.

Industrial Food Production

is the large-scale, mechanized manufacture of food products, utilizing advanced technologies and processes for mass production and distribution.

International Specializations

The phenomenon where countries focus on the production and export of goods and services that they can produce efficiently and trade for what they cannot produce as efficiently.