At the beginning of the year,a firm has current assets of $420 and current liabilities of $380. At the end of the year,the current assets are $500 and the current liabilities are $410. What is the change in net working capital?
A) -$80
B) -$50
C) $0
D) $50
E) $80

Question

Quizplus · Accepted Answer

Net working capital is calculated as current assets minus current liabilities. 
At the beginning of the year, net working capital is 420 - 380 = $40. 
At the end of the year, net working capital is 500 - 410 = $90. 
Therefore, the change in net working capital is 90 - 40 = $50 increase. 
The correct answer is D) $50.

At the Beginning of the Year,a Firm Has Current Assets