You are contemplating the expansion of your company's chain of coffee shops by adding a new artisanal bakery section. This expansion will necessitate an increase in inventory amounting to $9,000, an increase in accounts payable of $1,000, an increase in accounts receivable of $3,000 and an increase in property, plant, and equipment valued at $48,000. All other financial accounts will remain unaltered. What will be the change in net working capital resulting from the addition of the bakery section?

Analyse two ways a bakery could increase added value

Change in Working Capital: Scenario 3What would happen when the sales revenue increases as a result of more units sold? Answer based on a normal scenario.The working capital requirement will decreaseThe working capital requirement will remain unchangedThe working capital requirement will increase

Change in Working Capital: Scenario 2Which of the following statements will be true if the customers pay the company 12 days later than expected?The new working capital will increase to  $4.8 million.The new working capital will decrease to  $3.2 million.The new working capital will increase to  $9.6 million.

Henderson Office Supplies is considering a more liberal credit policy to increase sales, but it expects that 7 percent of the new accounts will be uncollectible. Collection costs are 6 percent of new sales, production costs are 73 percent of sales, and accounts receivable turnover is six times. Assume an increase in sales of $75,000. No other asset buildup will be required to service the new accounts. a. What is the level of investment in accounts receivable to support this sales expansion? Investment in accounts receivable           $  b. What would be Henderson’s incremental before‐tax return on investment? Return on incremental investment            % c. Should Henderson liberalize credit if a 35 percent before‐tax return is required (opportunity cost of capital)? multiple choice 1YesNo Assume Henderson also needs to increase its level of inventory to support new sales and that inventory turnover is two times on Cost of Goods Sold. d. What would be the total incremental investment in accounts receivable and inventory to support a $75,000 increase in sales? Total incremental investment           $  e. Given the income determined in part b and the investment determined in part d, should Henderson extend more liberal credit terms? multiple choice 2YesNo

A firm sold goods for $10,000 in cash. Those goods originally cost $12,000. What are the net changes on the accounts impacted by this transaction?1 pointTotal Assets have a net increase. Shareholders’ Equity has a net increase.Total Assets have a net increase. Shareholders’ Equity has a net decrease.Total Assets have a net decrease. Shareholders’ Equity has a net decrease.Total Assets have a net decrease. Shareholders’ Equity has a net increase.