A New Project Would Require an Immediate Increase in Raw

question 8

Multiple Choice

A new project would require an immediate increase in raw materials in the amount of $12,000. The firm expects that accounts payable will automatically increase $8,500. How much must the firm expect its investment in net working capital to change if they accept this project?

• A)+$20,000
• B)+$3,500
• C)(-$20,500)
• D)(-$3,500)

---

Definitions:

Weekly Income

The total amount of money earned or received by an individual or household in the span of one week.

Normal Model

A statistical model that assumes the dataset follows a normal distribution, often used in various statistical analyses.

Probability

Probability is a measure of the likelihood that a particular event will occur, expressed as a number between 0 and 1, where 0 indicates impossibility and 1 indicates certainty.

Poisson Approximation

A mathematical method for estimating the likelihood of a certain number of occurrences taking place within a set time period.