ZuoTi.Pro
Question

You are considering adding a new division into your existing firm. This will entail an increase...

You are considering adding a new division into your existing firm. This will entail an increase in inventory of $8,421, an increase in accounts payables of $2,067, and an increase in property, plant, and equipment of $40,000. All other accounts will remain unchanged. The change in net working capital resulting from the addition of the new division is _______________. Enter your answer in dollars and round to the nearest dollar.

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Change in net working capital = Current assets - Current liabilities

Change in net working capital = $8,421 - $2,067

Change in net working capital = $6,354

0 0
Add a comment
Know the answer?
Add Answer to:
You are considering adding a new division into your existing firm. This will entail an increase...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • A firm is considering the purchase of a new machine to increase the productivity of existing...

    A firm is considering the purchase of a new machine to increase the productivity of existing production process. All the alternatives have a life of 10 years and they have negligible market value after 10 years. Use the IRR method (incrementally) to make your recommendation. The firm’s MARR is 10% per year. (10 marks) A firm is considering the purchase of a new machine to increase the productivity of existing production process. All the alternatives have a life of 10...

  • 9) Your new firm just purchased a storage building and property for $40,000 that was paid...

    9) Your new firm just purchased a storage building and property for $40,000 that was paid for with a $20,000 long-term loan and a new infusion of $20,000 from the owners. Which of the following accounting entries is most appropriate? A) $40,000 increase in plant, property and equipment, a $20,000 decrease in long-term debt, and a $20,000 decrease in owners equity. B) $40,000 increase in plant, property and equipment, a $20,000 increase in long-term debt, and a $20,000 increase in...

  • Problem 11-06 New-Project Analysis The Campbell Company is considering adding a robotic paint sprayer to its...

    Problem 11-06 New-Project Analysis The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $1,180,000, and it would cost another $24,000 to install it. The machine falls into the MACRS 3-year class (the applicable MACRS depreciation rates are 33.33%, 44.45%, 14.81%, and 7.41%), and it would be sold after 3 years for $670,000. The machine would require an increase in net working capital (inventory) of $13,000. The sprayer would not change...

  • New-Project Analysis The Campbell Company is considering adding a robotic paint sprayer to its production line....

    New-Project Analysis The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $930,000, and it would cost another $22,000 to install it. The machine falls into the MACRS 3-year class (the applicable MACRS depreciation rates are 33.33%, 44.45%, 14.81%, and 7.41%), and it would be sold after 3 years for $502,000. The machine would require an increase in net working capital (inventory) of $16,500. The sprayer would not change revenues, but...

  • The Lumber Yard is considering adding a new product line that is expected to increase annual...

    The Lumber Yard is considering adding a new product line that is expected to increase annual sales by $230,000 and cash expenses by $146,000. The initial investment will require $120,000 in fixed assets that will be depreciated using the 5-year MACRS. The company has a marginal tax rate of 29 percent. What is the project OCF in year 2? (Do not include the dollar sign ($). Round your answer to a whole dollar. (e.g., 4,132) MACRS 5-year property Year Rate...

  • Problem 11-06 New-Project Analysis The Campbell Company is considering adding a robotic paint sprayer to its...

    Problem 11-06 New-Project Analysis The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $820,000, and it would cost another $23,000 to install it. The machine falls into the MACRS 3-year class (the applicable MACRS depreciation rates are 33.33%, 44.45%, 14.81%, and 7.41%), and it would be sold after 3 years for $635,000. The machine would require an increase in net working capital (inventory) of $9,500. The sprayer would not change...

  • Problem 11-06 New-Project Analysis The Campbell Company is considering adding a robotic paint sprayer to its...

    Problem 11-06 New-Project Analysis The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $1,010,000, and it would cost another $17,500 to install it. The machine falls into the MACRS 3-year class (the applicable MACRS depreciation rates are 33.33%, 44.45%, 14.81%, and 7.41%), and it would be sold after 3 years for $677,000. The machine would require an increase in net working capital (inventory) of $20,000. The sprayer would not change...

  • Problem 11-06 New-Project Analysis The Campbell Company is considering adding a robotic paint sprayer to its...

    Problem 11-06 New-Project Analysis The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $980,000, and it would cost another $19,000 to install it. The machine falls into the MACRS 3-year class (the applicable MACRS depreciation rates are 33.33%, 44.45%, 14.81%, and 7.41%), and it would be sold after 3 years for $508,000. The machine would require an increase in net working capital (inventory) of $10,000. The sprayer would not change...

  • Problem 13-6 New-Project Analysis The Campbell Company is considering adding a robotic paint sprayer to its...

    Problem 13-6 New-Project Analysis The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $1,080,000, and it would cost another $20,500 to install it. The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $632,000. The MACRS rates for the first three years are 0.3333, 0.4445, 0.1481, and 0.0741. The machine would require an increase in net working capital (inventory) of $20,000. The sprayer...

  • A firm is considering the acquisition of a new machine. The base price Is $85,000 and...

    A firm is considering the acquisition of a new machine. The base price Is $85,000 and it would cost $15,000 to install. The machine is MACRS 3 year class property and it will be sold after 3 years for $17,000. The machine would also require an increase in net working capital of $10,000. The machine is expected to increase before tax revenues by $40,000 per year. This firm is in a 34 % marginal tax bracket. MACRS 3 year factors...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT