Fontana Painting Had the Following Data for the Most Recent

question 29

Multiple Choice

Fontana Painting had the following data for the most recent year (in millions) . The new CFO believes that the company could improve its working capital management sufficiently to bring its NWC and CCC up to the benchmark companies' level without affecting either sales or the costs of goods sold. Fontana finances its net working capital with a bank loan at an 8% annual interest rate, and it uses a 365-day year. If these changes had been made, by how much would the firm's pre-tax income have increased?

• A) 1,901
• B) 2,092
• C) 2,301
• D) 2,531
• E) 2,784

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Definitions:

Geological Theory

A foundational principle in geology that explains the structure of the Earth’s crust and the processes that shape it over time, including plate tectonics and erosion.

Deposits

Materials laid down or settled from a state of suspension or solution in a fluid, often referring to geological or financial contexts.

Canadian Shield

A large geological shield covered by a thin layer of soil that spans across eastern and central Canada, known for its rich mineral deposits.