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Leni [432]
2 years ago
14

A new project would require an immediate increase in raw materials in the amount of $12,000. The firm expects that accounts paya

ble will automatically increase $8,500. How much must the firm expect its investment in net working capital to change if they accept this project
Business
1 answer:
Mariulka [41]2 years ago
6 0

Answer: Increase by $3,500

Explanation:

The Net Working Capital of a company is calculated by subtracting Current liabilities from current assets.

Raw materials are current assets and Accounts Payable are current liabilities.

The Net working capital resulting from accepting this project is;

= 12,000 - 8,500

= $3,500

Net Working capital investment would increase by $3,500.

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