John Boy Industries Has a Cash Balance of $59,000, Accounts

question 31

Multiple Choice

John Boy Industries has a cash balance of $59,000, accounts payable of $139,000, inventory of $115,000, accounts receivable of $220,000, notes payable of $175,000, and accrued wages and taxes of $23,000. How much net working capital does the firm need to fund?

• A) $140,000
• B) $34,000
• C) −$25,000
• D) $57,000

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Definitions:

Pareto's Law

A principle stating that a small proportion of causes is responsible for a large portion of the effect, often summarized as 80% of effects come from 20% of causes.

80/20 Principle

The 80/20 Principle, also known as the Pareto Principle, is the idea that roughly 80% of effects come from 20% of causes, often observed in business, economics, and various other fields.

"Should Do" Objectives

Goals or aims that are considered important and beneficial for an individual or organization to attempt to achieve, though they might not be critical.

Planning Horizon

The time period over which an individual or organization projects, plans, and makes decisions for future actions.