A Project Is Expected to Increase Inventory by $17,000,increase Accounts

question 40

Multiple Choice

A project is expected to increase inventory by $17,000,increase accounts payable by $10,000,and decrease accounts receivable by $1,000.What is the project's cash flow from net working capital at time zero?

• A) −$8,000
• B) $8,000
• C) −$6,000
• D) $6,000

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Definitions:

Factory Rent

The cost incurred by a business for leasing a manufacturing facility or space where production activities are carried out.

Factory Overhead

All the supplementary costs tied to manufacturing, aside from the expenses of direct materials and direct labor.

Amortization

The periodic transfer of the cost of an intangible asset to expense.

Direct Labor Used

The total hours worked by employees directly involved in the production process, impacting manufacturing costs.