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:

Strategic Marketing Process

A methodical approach to planning and executing marketing strategies that align with a company's overarching goals.

Communication

The process of conveying a message to others that requires six elements: a source, a message, a channel of communication, a receiver, and the processes of encoding and decoding.

Strategic Marketing Process

A systematic approach to creating and implementing marketing strategies that effectively align with an organization's business goals and meet customer needs.

Line Operating Managers

Managers who are directly responsible for overseeing the production and provision of an organization's products or services.