Home Furnishings Express Is Expanding Its Product Offerings to Reach

Multiple Choice

Home Furnishings Express is expanding its product offerings to reach a wider range of customers.The expansion project includes increasing the floor inventory by $430,000 and increasing its debt to suppliers by 70 percent of that amount.The company will also spend $450,000 for a building contractor to expand the size of its showroom.As part of the expansion plan,the company will be offering credit to its customers and thus expects accounts receivable to rise by $90,000.For the project analysis,what amount should be used as the initial cash flow for net working capital?

A) -$39,000
B) -$70,000
C) -$156,000
D) -$219,000
E) -$391,000