A new project would require an immediate increase in raw materials in the amount $6,000. The firm expects that accounts payable will automatically increase $2,000. How much must the firm expect its investment in net working capital to increase if they accept this project?

Question

Quizplus · Accepted Answer

The increase in net working capital is calculated as the increase in raw materials ($6,000) minus the increase in accounts payable ($2,000), resulting in a net increase of $4,000.

A New Project Would Require an Immediate Increase in Raw