A Company Is Considering Expanding Operations to Meet Growing Demand

Multiple Choice

A company is considering expanding operations to meet growing demand. With the capital expansion the working capital requirements are expected to change. Management expects cash to increase by £10,000, accounts receivable by £20,000, and inventories by £30,000. At the same time accounts payable will increase by £40,000, accruals by £30,000, and long- term debt by £80,000. The change in net working capital is

A) a decrease of £10,000.
B) an increase of £10,000.
C) a decrease of £90,000.
D) an increase of £80,000.