A Firm Is Considering Changing Their Credit Terms

question 84

Multiple Choice

A firm is considering changing their credit terms. It is estimated that this change would result in sales increasing by $1,600,000. This in turn would cause inventory to increase by $125,000, accounts receivable to increase by $100,000, and accounts payable to increase by $90,000. What is the firm's expected change in net working capital?

• A) $1,735,000
• B) $315,000
• C) $225,000
• D) $135,000

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Definitions:

Recognizing Patterns

The capability of identifying regularities, structures, or specific arrangements within sets of data, often utilizing machine learning algorithms for analysis.

Duplication

The act or process of producing an exact copy of something.

Total Cost

The complete amount of money spent on the purchase of goods or services, including all related expenses.

Sensory Experiences

Interactions with the environment that involve stimulation of any of the senses, providing a subjective perceptual experience.