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A Firm Is Considering Changing Their Credit Terms

Question 48

Multiple Choice

A firm is considering changing their credit terms. It is estimated that this change would result in sales increasing by $1,600,000. This in turn would cause inventory to increase by $125,000, accounts receivable to increase by $100,000, and accounts payable to increase by $90,000. What is the firm's expected change in net working capital?


A) $1,735,000
B) $315,000
C) $225,000
D) $135,000

Correct Answer:

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