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# Net Working Capital

Determine the change in net working capital that appears warranted for the following proposed project: Inventory levels will increase 20% from their current value of \$500,000; cash will increase by \$25,000; wage accruals will increase by \$60,000; machinery will increase by \$75,000; accounts receivable -- because of a new collection system -- will increase by only \$15,000; accounts payable will increase by \$45,000. What happens to net working capital at the end of the project's life?

#### Solution Preview

Determine the change in net working capital that appears warranted for the following proposed project: Inventory levels will increase 20% from their
current value of \$500,000; cash will increase by \$25,000; wage accruals will increase by \$60,000; machinery will increase by \$75,000; accounts receivable--
because of a new collection ...

#### Solution Summary

Determine the change in net working capital that appears warranted for the following proposed project: Inventory levels will increase 20% from their current value of \$500,000; cash will increase by \$25,000; wage accruals will increase by \$60,000; machinery will increase by \$75,000; accounts receivable -- because of a new collection system -- will increase by only \$15,000; accounts payable will increase by \$45,000. What happens to net working capital at the end of the project's life?

\$2.19