Answer:
The firm's expected change in net working capital: Net working capital increases by $255,000
Explanation:
Net working capital is calculated by using following formula:
Net working capital = Current assets - Current Liabilities
The inventory increases by $175,000, accounts receivable increases by $140,000.
The Current assets increases by: $175,000 + $140,000 = $315,000
The accounts payable increases by $60,000, the Current Liabilities increases by $60,000
Net working capital increases by: $315,000 - $60,000 = $255,000
