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barxatty [35]
3 years ago
8

You are considering adding a microbrewery on to one of your firm's existing restaurants. This will entail an increase in invento

ry of $8000, an increase in Accounts payable of $2500, and an increase in property, plant, and equipment of $40,000. All other accounts will remain unchanged. The change in net working capital resulting from the addition of the microbrewery is: Group of answer choices
a. $45,500
b. 10500c. 6500d. 5500
Business
1 answer:
scoray [572]3 years ago
6 0

Answer:

The answer is: D) $5,500

Explanation:

To calculate the change in working capital we use the following formula:

Change in working capital = change in current assets - change in current liabilities

Since we don't know the current assets or liabilities from previous years, we can consider them to be 0.

Change in working capital = current assets - current liabilities

Change in working capital = $8,000 (inventory) - $2,500 (accounts payable)

Change in working capital = $5,500

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