Butler Automotive Developed a New Diagnostic Testing Procedure That Is

question 72

Multiple Choice

Butler Automotive developed a new diagnostic testing procedure that is expected to increase sales by $10,000 per month.As more drivers bring in their vehicles,Butler expects to also do more oil changes and brake repairs.As a result,inventory levels of oil and brake parts must be increased by $5,000.Revenues from oil changes and brake jobs are expected to increase by $4,000 per month.An example of an increase in net working capital requirements from the new diagnostic testing procedure is the

• A) increase in inventory levels of oil and brake parts of $5,000.
• B) increase in revenue of $10,000 per month for the diagnostic testing.
• C) increase in revenues from oil changes and brake jobs of $4,000 per month.
• D) increase in all activities totaling $19,000 per month.

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Definitions:

Accumulator

A device in hydraulic systems used to store pressurized hydraulic fluid, providing a reserve of power for various functions when needed.

Hydraulic Circuit

A system using pressurized fluid to transmit and control power in various machines and equipment, crucial for their operation.

Spring Force

The force exerted by a spring in response to an applied load, often described by Hooke's Law.

Pump Discharge Pressure

The pressure at which fluid is expelled from the outlet of a pump, crucial for the operation of hydraulic and fluid systems.