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

question 88

Multiple Choice

What is the effect on a firm's net working capital if a new project requires a $30,000 increase in inventory, a $10,000 increase in accounts receivable, a $35,000 increase in machinery, and a $20,000 increase in accounts payable?

• A) -$5,000
• B) $10,000
• C) $20,000
• D)$55,000

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Definitions:

Abraham Maslow's Hierarchy

A theory in psychology, proposed by Abraham Maslow, which comprises a five-tier model of human needs, depicted as hierarchical levels within a pyramid.

Safety Needs

Fundamental requirements for security and protection from physical and emotional harm, as one of the levels in Maslow's hierarchy of needs.

Deficit Principle

A concept in motivation that suggests individuals are motivated to satisfy deprived needs, or deficits, to maintain a base level of comfort.

Compensation

The combination of salary, wages, and benefits that an employee receives in exchange for their work.