A Corporation Is Considering Expanding Operations to Meet Growing Demand

question 108

Multiple Choice

A corporation is considering expanding operations to meet growing demand. With the capital expansion the current accounts are expected to change. Management expects cash to increase by $10,000, accounts receivable by $20,000, and inventories by $30,000. At the same time accounts payable will increase by $40,000, accruals by $30,000, and long-term debt by $80,000. The change in net working capital is ________.

• A) an increase of $10,000
• B) a decrease of $10,000
• C) a decrease of $90,000
• D) an increase of $80,000

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Definitions:

Uneasy Alliance

A cooperative relationship between parties or nations that have differing interests or ideologies, often marked by mutual distrust but pursued for mutual benefit.

Illinois Colonists

Refers to early settlers in Illinois during the period of American Frontier expansion, although "Illinois Colonists" might not be a widely recognized term.

Mississippi River Trade

This term refers to the economic activities and trade that historically took place along the Mississippi River, playing a crucial role in the development and growth of the United States, especially in the transportation of agricultural goods.

Natchez

A city in Mississippi known for its rich history and antebellum architecture.