Next year, you are forecasting sales for your company of $12 million. There is only one category of current asset on your company's balance sheet, inventory. The balance at the beginning of the year was $1.4 million, at the end of the year, $1.8 million. The only current liabilities on the company's balance sheet was accounts payable. At the beginning of the year, the balance was $500,000, at the end of the year, $600,000. What is the change in net working capital for the year? O A. A reduction in free cash flow of $400,000. O B. A reduction in free cash flow of $500,000. O C. An increase in free cash flow of $500,000. D. An increase in free cash flow of $400,000. E. A reduction in free cash flow of $300,000.

Next year, you are forecasting sales for your company of $12 million. There is only one category of current asset on your company's balance sheet, inventory. The balance at the beginning of the year was $1.4 million, at the end of the year, $1.8 million. The only current liabilities on the company's balance sheet was accounts payable. At the beginning of the year, the balance was $500,000, at the end of the year, $600,000. What is the change in net working capital for the year? O A. A reduction in free cash flow of $400,000. O B. A reduction in free cash flow of $500,000. O C. An increase in free cash flow of $500,000. D. An increase in free cash flow of $400,000. E. A reduction in free cash flow of $300,000.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 2TP: Austins cell phone manufacturer wants to upgrade their product mix to encompass an exciting new...

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