Question

Segwick Corp is estimating sales in Year 1 of $250,000 and cost of goods sold of...

Segwick Corp is estimating sales in Year 1 of $250,000 and cost of goods sold of $100,000. Given the following assumptions for Year 1, what is the projected change in working capital for that year? (Round to nearest $)

Initial (Year 0) Working Capital

$10,000

Cash

2% of sales

Accounts Receivable

10 days outstanding (360-day year)

Inventory

Three months x cost of goods sold

Accounts Payable

50% of inventory

a.

($14,444)

b.

($24,444)

c.

($34,444)

d.

($44,444)
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