A Firm Is Considering Changing Their Credit Terms

Multiple Choice

A firm is considering changing their credit terms. It is estimated that this change would result in sales increasing by $1,000,000. This in turn would cause inventory to increase by $150,000, accounts receivable to increase by $100,000, and accounts payable to increase by $75,000. What is the firm's expected change in net working capital?

A) $325,000
B) $250,000
C) $175,000
D) $1,175,000