A New Project Requires an Increase in Both Current Assets

question 52

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 the 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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