Issuing additional long-term debt of $5 million and buying new long-term assets worth $4 million and short-term assets of $1 million will result in a net cash flow of _____ and a change in net working capital of ____.

Question

Quizplus · Accepted Answer

Issuing new long-term debt is a source of capital and buying new assets is a use of cash. So, the net cash flow is zero. Net working capital increases by the $1 million invested in short-term assets.

Issuing Additional Long-Term Debt of $5 Million and Buying New