Describe the change in working capital

Assignment Help Microeconomics
Reference no: EM13173852

A project proposal for a new product will require a buildup of $50,000 of inventory in year 0 before sales are started. Associated with this, accounts payable will also increase by $20,000 in year 0. Both of these will stay constant at these amounts in years 1-3 and beyond. After sales start in year 1, accounts receivable is expected to increase to $30,000 in year 1, to $40,000 in year 2, and to $50,000 in year 3 and continue at $50,000 into the future. Assume that no other working capital items are affected.

What will be the change in working capital for each year (0-3)?

What will be the change in cash flow from working capital in years 0-3?

Reference no: EM13173852

Questions Cloud

Prepare a multiplc-step laconic statement : Prepare a multiplc-step laconic statement and prepare a retained earnings statement - analysis of the accounts and discussions with company officials
Compute the freezing point and boiling point : A solution is made by dissolving 0.679 mol of nonelectrolyte solute in 871 g of benzene. Calculate the freezing point and boiling point of the solution.
Compute deltag rxn : Calculate DeltaG °rxn. c) In which direction is the reaction, as written, spontaneous at 25 °C and standard pressure?
Relationship between myelin sheath and dopmaine : What is the relationship between myelin sheath and dopmaine? What does myelin sheath do, how does it porvide insultion. What disease are caused when myelin sheath stops working and how does this effect elderly people?
Describe the change in working capital : A project proposal for a new product will require a buildup of $50,000 of inventory in year 0 before sales are started. Associated with this, accounts payable will also increase by $20,000 in year 0.
What is the molarity of the nitrate ions : What is the molarity of the nitrate ions when 0.35 mol of barium nitrate, Ba(NO3)2, is dissolved in enough water to make 3.0 L of solution?
How many moles of hydrogen gas are formed by reacting : A penny with a scored edge allows the HCl to react with the internal zinc metal, leaving a shell of unreacted copper. How many moles of hydrogen gas are formed by reacting a penny with excess HCl?
Explain what is the direction of equilibrium and by how much : Consider that sodium hydroxide is added to acetic acid (CH3COOH). What is the direction of equilibrium and by how much. Pka of Sodium Hydroxide
Increase or decrease of aggregate demand : increase aggregate demand by cutting government spending or raising taxes. decrease aggregate demand by cutting government spending or raising taxes.

Reviews

Write a Review

Microeconomics Questions & Answers

  Maximum price investors

Atlantis will lose its patent protection, and analysts expect economic profit to be zero after five years and which is also the maximum price investors would be willing to pay for Atlantis Company.

  Elasticity of demand

The government wants to decrease the consumption of electricity by 10 percent. The price elasticity of demand for electricity is -0.4.

  Question about pricing strategies

According to Cahner's In Stat Group, number of worldwide wireless phone users will soon reach one billion. In the United States alone, the number of users is expected to increase by 17 million per year for the next five years.

  What is the equation of budget line

What is the equation of his budget line and sketch the budget line and two possible indifference curves that Herbert

  Estimate expected demand

If we believe that the laws of supply and demand always hold, explainc why is it that the 'popular' gifts for the holidays always sell out early?

  Computing the concentration ratio

Industry structure is often examine through computing the 4-company Concentration Ratio. Assume you have an industry with 20 firms and the CR is 30 percent.

  What is meant by the concept of a standard of living

What are the difficulties in measuring this within one country and making comparisons of the standard of living of people in different countries?

  Discuss the health care problem of limited access

Two major areas of health care reform involve universal access and containing costs. List the specific options discussed in your text that work toward these reforms.

  Why would chrysler have instituted this production change

Explain why Chrysler's decision might have been prompted by movements in its wage costs or capital costs, or both. Why would Chrysler have instituted this production change for its most popular

  How much must justin charge to avoid shutdown

A new contraption to help you eat yogurt easily while driving, autogurt, is now on the market. It costs Justin $2 in equipment per unit, and takes him approximately 6 min to make. Justin charges $20 per hour. Justin additionally pays an electricit..

  What will the consumer do to arrive at a new equilibrium

For which types of business organization is unlimited liability going to apply to - a sole proprietorship, a partnership or a corporation? Now explain out of those business organizations, for which one will unlimited liability be the greatest prob..

  What is the firms per-unit profit

What is the equilibrium quantity in this market and what is the equilibrium price in this market and what are the resulting output, revenue, cost, and profit of the typical firm?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd