1. As long as the interest rate is greater than zero, the future value of a single sum will always:
a. Equal the future value if the time period is one year.
b. Increase as the number of periods increases.
c. Decrease as the interest rate increases.
d. Increase as the period of time decreases.
e. Be less than the present value.
2. A new project will cause accounts payable to increase by $70,000, accounts receivable to increase by $70,000 and inventory to decrease by $10,000. Which one of the following statements is true?
a. The change in inventory is a use of cash.
b. The change in accounts payable is a use of cash.
c. The project will decrease the amount of cash provided to customers.
d. Net working capital will decrease.
e. The project will not affect net working capital.
3. A new project will cause accounts payable to increase by $70,000, accounts receivable to increase by $70,000 and inventory to decrease by $10,000. Which one of the following statements is true?
a. The change in inventory is a use of cash.
b. The change in accounts payable is a use of cash.
c. The project will decrease the amount of cash provided to customers.
d. Net working capital will decrease.
e. The project will not affect net working capital.