All of the Following Are Anticipated Effects of a Proposed

question 66

Multiple Choice

All of the following are anticipated effects of a proposed project.Which of these should be included in the initial project cash flow related to net working capital?
I.an inventory decrease of €5,000
II.an increase in trade receivables of €1,500
III.an increase in non-current assets of €7,600
IV.a decrease in trade payables of €2,100

• A)I and II only.
• B)I and III only.
• C)II and IV only.
• D)I,II,and IV only.
• E)I,II,III,and IV.

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Definitions:

Preferred Stockholders

Investors who own preferred shares in a company, having priority over common stockholders in receiving dividends and assets upon liquidation.

Dividend

A portion of a company's earnings distributed to its shareholders, typically in cash or additional stock.

Drawing Account

A separate account used to track the amount of money or assets taken out of a business by its owners for personal use.

Separate Capital Account

An account used in partnerships and sole proprietorships that shows the owner's original investment plus any retained earnings or minus any losses and withdrawals.