A Firm Is Considering Changing Their Credit Terms

question 43

Multiple Choice

A firm is considering changing their credit terms.It is estimated that this change would result in sales increasing by $1,000,000.This in turn would cause inventory to increase by $150,000,accounts receivable to increase by $100,000,and accounts payable to increase by $75,000.What is the firm's expected change in net working capital?

• A)$1,175,000
• B)$325,000
• C)$250,000
• D)$175,000

---

Definitions:

Management

The process of planning, organizing, leading, and controlling resources to achieve organizational goals efficiently and effectively.

Resolution

The act of solving or settling a conflict, problem, or dispute, often through negotiation or agreed upon processes.

Aspirations

Desires or goals aimed at accomplishing something.

Strategy

A plan of action designed to achieve a long-term or overall aim, often involving tactical decisions.