For Project a in Year 2,inventories Increase by $12,000 and Accounts

question 49

Multiple Choice

For project A in year 2,inventories increase by $12,000 and accounts payable increases by $2,000.Accounts receivable remain the same.Calculate the increase or decrease in net working capital for year 2.

• A)decreases by $14,000
• B)increases by $14,000
• C)decreases by $10,000
• D)increases by $10,000

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Definitions:

Investing Activities

Transactions involving the acquisition or disposal of long-term assets and other investments not considered as cash equivalents by a company.

Net Book Value

The current book value of an asset or company after accounting for depreciation or amortization.

Cash Flow

The net amount of cash being transferred in and out of a business, representing the company's operational, investing, and financing activities.

Investing Section

A segment within the cash flow statement that records cash activities related to non-current assets such as buying and selling equipment or property.