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What is the effect on a firm's net working capital if a new project requires a $30,000 increase in inventory, a $41,000 increase in accounts receivable, a $43,000 increase in machinery, and a $31,000 increase in accounts payable?

Respuesta :

Answer:

$40,000

Explanation:

As we know that net working capital is

Net working capital = Current assets - current liabilities

where,

Current assets = Increase in inventory + increase in account receivable

                        = $30,000 + $41,000

                        = $71,000

And, the current liabilities

= Increase in account payable

= $31,000

So, the effect on the firm net working capital is

= $71,000 - $31,000

= $40,000

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