If a new machine requires an increase in current assets from $50,000 to $60,000 and current liabilities from $30,000 to $50,000, the dollar change in net working capital is:

Question

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The net working capital before the purchase is $20,000 ($50,000 - $30,000) and after the purchase is $10,000 ($60,000 - $50,000). The change is a decrease of $10,000, which is negative.

If a New Machine Requires an Increase in Current Assets