1. A firm is considering changing their credit terms. It is estimated that this change would result in sales increasing by $1,800,000.This in turn would cause inventory to increase by $175,000, account receivable to increase by $110,000 and account payable to increase by $90,000. what is the firm's expected change in net working capital?

A. $285,000

B. $195,000

C. $375,000

D. $1,995,000

2. Considering the following two projects:

Project Year 0 Year 1 Year 2 Year 3 Year 4 Discount

Cash Flow Cash Flow Cash Flow Cash Flow Cash Flow Rate

A -100 40 50 80 N/A 0.15

B -73 30 50 30 30 0.15

The payback period for project A is closet to :

A. 2.1 years

B. 2.3 years

C. 1.9 years

D. 2.6 years