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As CFO your company is considering an expansion project
As CFO your company is considering an expansion project. The capital expansion will result in a $8,000 increase in cash, a $11,000 increase in accounts receivables, and a $5,000 decrease in inventory. At the same time, accounts payable will increase by $13,000, accruals will increase by $9,000, and long-term debt will increase by $10,000. What is the change in net working capital?
answer choices:
A decrease of $18,000
An increase of $2,000
An increase of $8,000
A decrease of $8,000
Expert Solution
rate positively .
| Add | increase in cash | 8000 |
| Add | increase in accounts receivables | 11,000 |
| Less | decrease in inventory | 5,000 |
| Less | accounts payable | 13,000 |
| Less | accruals will increase | 9000 |
| Net working capital | -8,000 | |
| Ans = A decrease of $8,000 |
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