The Card Shoppe needs to maintain 20 percent of its sales in net working capital.Currently,the shoppe is considering a 6-year project that will increase sales from its current level of $379,000 to $421,000 the first year and to $465,000 a year for the following 5 years of the project.What amount should be included in the project analysis for net working capital in year 6 of the project?
A)-$17,200
B)-$2,990
C)$0
D)$2,990
E)$17,200

Question

Quizplus · Accepted Answer

NWC recovery = ($465,000 - $379,000) × 0.2 = $17,200

The Card Shoppe Needs to Maintain 20 Percent of Its