29. You are considering adding a take-out deli onto one of your firm\'s existing

Question

29. You are considering adding a take-out deli onto one of your firm's existing restaurants, and at the same time renegotiating contracts with suppliers. This will entail an increase in inventory of $10,000, an increase in accounts payables of $4,500, and increase in wages payable of $1,000 and an increase in property, plant, and equipment of $6,000. All other accounts will remain unchanged. The change in net working capital resulting from the addition of the deli results in: a. a cash inflow of $4,500 b. a cash inflow of $5,500 c. a cash outflow of $4,500 d. a cash outflow of $5,500 e. a cash outflow of $11,500

Explanation / Answer

Increase in inventory $       (10,000) Increase in accounts payable $            4,500 Increase in wages payable $            1,000 Increase in plant, property and equipement $         (6,000) Change in net working capital (Cash outflow) $       (10,500)

Related Questions

Navigate

• Browse (All)
• Browse 2
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.