Problem:
What is the net effect on a firm's cash flow from changes in NET WORKING CAPITAL if a new project requires: $30,000 increase in inventory, $10,000 increase in accounts receivable, and a $20,000 increase in accounts payable?
- Cash inflow $5,000
- Cash outflow $10,000
- Cash outflow $20,000
- Cash inflow $55,000
Note: Please provide equation and explain comprehensively and give step by step solution.