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natka813 [3]
4 years ago
11

Smoltz company had $375,000 of current assets and $135,000 of current liabilities before borrowing $90,000 from the bank with a

3 month note payable. what effect did the borrowing transaction have on the amount of smoltz company's working capital?
Business
1 answer:
QveST [7]4 years ago
6 0
The borrowing transaction WILL INCREASE THE WORKING CAPITAL OF SMOLTZ COMPANY BY $90,000.00.
Working capital is defined as the amount of a company's asset that can be converted into cash in the near future, taking into account the payment which has to be made. Borrowing money increases the amount of working capital that a company has.
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Answer:

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given data

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1         $48,000

2         $46,000

3          $41,000

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to find out

Determine the internal rate of return

solution

we consider here  internal rate of return  is x

so we can say present value of inflows = present value of outflows

equate here

$95000 = \frac{48000}{(x)} +\frac{46000}{(x)^2} +\frac{41000}{(x)^3}  

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