Heremy's Flooring Is Expanding Its Product Offerings to Reach a Wider

question 26

Multiple Choice

Heremy's Flooring is expanding its product offerings to reach a wider range of customers. The expansion project includes increasing the floor inventory by $175,000 and increasing its debt to suppliers by 50% of that amount. The company will also spend $270,000 for a building contractor to expand the size of the showroom. As part of the expansion plan,the company will be offering credit to its customers and thus expects accounts receivable to rise by $25,000. For the project analysis,what amount should be used as the initial cash flow for net working capital?

• A) $112,500
• B) $131,000
• C) $152,000
• D) $172,000
• E) $175,000

---

Definitions:

Limiting Reactant

The reactant that is totally consumed in a chemical reaction, limiting the amount of product that can be formed.

HCl

Hydrochloric acid, a strong, corrosive acid consisting of hydrogen and chlorine.

LiOH

Lithium hydroxide, a white hygroscopic crystalline substance used in the production of lithium greases, batteries, and in carbon dioxide absorption systems.

Forensic Evidence

Any information or material that can be used in a court of law to support or dispute facts, including but not limited to biological, chemical, physical, or digital evidence.