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Use the following information to calculate the additional funds needed for working capital: Revenues are $90,000...

Use the following information to calculate the additional funds needed for working capital:

Revenues are $90,000 in the current year

Next year's revenues are expected to equal $100,000

Receivables are usually 20%

Inventory is usually 10% of revenues

Payables are usually 5% of revenues

a. $25,000 b. $22,500 c. $3,000 d. $2,500

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Answer #1

Correct answer is (d) $2,500

18,000−20,000 = +2,000
9,000-10,000 = +1,000
4,500-5,000 = -500

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