Jeff's Stereos is expanding its product offerings which includes increasing the floor inventory by $150,000,increasing accounts receivable by $35,000,and increasing its debt to suppliers by $75,000.The company will also spend $200,000 for a building contractor to expand the size of the showroom.What is the amount of the project's initial cash flow?

Question

Quizplus · Accepted Answer

The initial cash flow includes the increase in inventory ($150,000), increase in accounts receivable ($35,000), and the cost of the building contractor ($200,000), minus the increase in debt to suppliers ($75,000). Thus, the initial cash flow is $150,000 + $35,000 + $200,000 - $75,000 = $310,000.

Jeff's Stereos Is Expanding Its Product Offerings Which Includes Increasing