In which of the following cases will a cash investment in net working capital be most likely?
A) Inventory levels will be reduced when the project is introduced.
B) All sales related to the project will be cash sales to a subsidiary.
C) The project will increase inventory more than accounts payable.
D) The project will require additional inventory which will be financed by a supplier.

Question

Quizplus · Accepted Answer

An increase in inventory more than accounts payable will require additional cash investment in net working capital to fund the increase in inventory. The other choices do not necessarily require a cash investment in net working capital.

In Which of the Following Cases Will a Cash Investment