If a Project Is Expected to Increase Inventory by $17,000,increase

question 65

Multiple Choice

If a project is expected to increase inventory by $17,000,increase accounts payable by $10,000,and decrease accounts receivable by $1,000,what effect does working capital have during the life of the project?

• A) Increases investment by $4,000.
• B) Increases investment by $5,000.
• C) Increases investment by $6,000.
• D) Working capital has no effect during the life of the project.

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Definitions:

Postretirement Health Care Benefits

Benefits provided by an employer to retired employees, covering medical and health-related expenses.

Tax Deductible

Expenses or costs that can be subtracted from gross income to reduce the taxable income.

ERISA

The Employee Retirement Income Security Act of 1974, a federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry.

Pension Reform Act

Legislation aimed at improving the management and sustainability of pension funds.