Question: Rising Star Inc is forecasting that their sales will increase by $250,000 next year, $275,000 the following year, and $300,000 in the third year. The
Rising Star Inc is forecasting that their sales will increase by $250,000 next year, $275,000 the following year, and $300,000 in the third year. The company estimates that additional cash requirements will be 6% of the change in sales, inventory will increase by 5% of the change in sales, receivables will increase by 8% of the change in sales, and payables will increase by 10% of the increase in sales.
Find the forecasted increase in net working capital for Rising Star over the next three years.
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