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A firms net working capital is proportional to its sales. Historically, inventory is 10.00% of sales, accounts receivable is 20.00% of sales, and accounts payable
A firms net working capital is proportional to its sales. Historically, inventory is 10.00% of sales, accounts receivable is 20.00% of sales, and accounts payable is 12.00% of sales. Below, we have the sales forecast for the upcoming four years: (in millions)
Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | |
---|---|---|---|---|---|
Sales | $5.75 | $8.91 | $15.65 | $17.75 | $19.00 |
What will be the investment in NWC for year 2? (answer in terms of millions, xx.xx million)
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