A New Project Requires an Increase in Both Current Assets

question 13

Multiple Choice

A new project requires an increase in both current assets and current liabilities of $125,000 each.What is the overall impact on net working capital investment?

• A) An increase of zero
• B) An increase of $125,000
• C) An increase of $250,000
• D) An increase of $62,500, when averaged over the life of the project

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Definitions:

Responsiveness

The ability of an organism or system to adjust and react to changes or stimuli in its environment.

Respiration

The physiological process of exchanging gases between an organism's cells and its environment, involving oxygen intake and carbon dioxide expulsion.

Digestion

The biological process by which food is broken down into smaller components, eventually to be absorbed into the bloodstream.

Homeostasis

A state of steady internal, physical, and chemical conditions maintained by living systems.