A new project is expected to have the following effects on the financial statements of a firm. The effect of a reduction in accounts payable should be included in the net working capital requirements for the project.

Question

Quizplus · Accepted Answer

A reduction in accounts payable increases the net working capital requirements because it implies that the company needs to use more of its own funds to finance its operations instead of relying on credit from suppliers.

A New Project Is Expected to Have the Following Effects