A new project would require an immediate increase in raw materials in the amount of $12,000. The firm expects that accounts payable will automatically increase $8,500. How much must the firm expect its investment in net working capital to change if they accept this project?

Question

Quizplus · Accepted Answer

The increase in net working capital is the increase in raw materials ($12,000) minus the increase in accounts payable ($8,500), resulting in a net increase of $3,500.

A New Project Would Require an Immediate Increase in Raw