Ask Question
BusinessBusiness
18 May, 13:48

Butler Automotive developed a new diagnostic testing procedure that is expected to increase sales by $10,000 per month. As more drivers bring in their vehicles, Butler expects to also do more oil changes and brake repairs. As a result, inventory levels of oil and brake parts must be increased by $5,000. Revenues from oil changes and brake jobs are expected to increase by $4,000 per month. An example of an increase in net working capital requirements from the new diagnostic testing procedure is the

A) increase in inventory levels of oil and brake parts of $5,000.

B) increase in revenue of $10,000 per month for the diagnostic testing.

C) increase in revenues from oil changes and brake jobs of $4,000 per month.

D) increase in all activities totaling $19,000 per month.

+1
Answers (1)
  1. 18 May, 17:37
    0
    A

    Explanation:

    Working capital are the components of the current assets that represents liquidity, readily available for day to day business operation.

    It is made up of cash, receivable, payable, inventory balance.

    Due to the new development in the business of Butler automotive, there is an upsurge in the demand for oil which has led to the increase in the oil inventory to the tune of $5,000

    This means that the required working capital of Butler also has to increase to meet up with the demand.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Butler Automotive developed a new diagnostic testing procedure that is expected to increase sales by $10,000 per month. As more drivers ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
Describe two things you can do to make sure you use credit responsibly. Explain why these things are important.
Answers (1)
Which of the following statements comparing the European System of Central Banks and the Federal Reserve System is TRUE?
Answers (1)
Beridze Manufacturing expects to produce 2900 units in January and 3100 units in February. Beridze budgets $35 per unit for direct materials.
Answers (1)
Calculate the amount of depreciation to report during the year ended December 31 for equipment that was purchased at a cost of $43,000 on October 1.
Answers (1)
Which word represents the total cost of the item you're purchasing on credit minus any down payment you make upfront? APR Principal Term Interest Rate
Answers (1)
New Questions in Business
7. Research on neurotransmitters indicates that:A) a single synapse generally uses several dozen neurotransmitters. B) neurotransmitters can inhibit neural impulse transmission.
Answers (1)
Intellectual property assets are A. depreciated B. depleted C. amortized D. Expensed
Answers (2)
Jane smith currently holds tax-exempt bonds of good samaritan health care that 7% interest. she is in the 35% tax bracket. her broker wants her to buy some beverly enterprises taxable bonds that will be issued next week.
Answers (1)
Julio decides his business will begin staying open until 7 p. m. instead of 6 p. m. The next day, the shop stays open until 7 p. m. This environment of flexibility to quickly change is characteristic of what form of business organization?
Answers (1)
Which of the following factors does not cause a shift in the labor demand curve? A. Changing technology. B. Changes in output prices. C. Changes in the wage rate. D. Changing input prices.
Answers (1)
Home » Business » Butler Automotive developed a new diagnostic testing procedure that is expected to increase sales by $10,000 per month. As more drivers bring in their vehicles, Butler expects to also do more oil changes and brake repairs.
Sign Up Forgot Password?