Asked by Kalin Williams on Jun 27, 2024
Verified
A project increases accounts receivable and accounts payable by $500,000.00 each. All other working capital accounts are unaffected. What is the project's effect on working capital?
A) Working capital increases by $1 million.
B) Cannot be calculated without considering accumulated depreciation.
C) Working capital is unaffected.
D) Working capital increases, but the amount cannot be determined.
Working Capital
The difference between a company's current assets and current liabilities, indicating the short-term financial health.
Accounts Receivable
Debts owed by customers to a business for products or services provided but not yet compensated for.
Accounts Payable
The amount of money that a company owes to its creditors for goods or services that it has received but not yet paid for.
- Assess the repercussions of adjustments in working capital on the financial outcomes of a project.
Verified Answer
Learning Objectives
- Assess the repercussions of adjustments in working capital on the financial outcomes of a project.
Related questions
Layer Corporation Has Provided the Following Information Concerning a Capital ...
A New Project Will Cause Accounts Payable to Increase by ...
Kay's Nautique Is Considering a Project Which Will Require Additional ...
In Calculating the Investment Required for the Project Profitability Index ...
(Ignore Income Taxes in This Problem ...