Change in net working capital calculation Samuels Manufacturing is considering the purchase of a new machine to replace one it believes is obsolete. The firm

has total current assets of $$916,000$ and total current liabilities of $$646,000.$ As a result of the proposed replacement, the following changes are anticipated in the

levels of the current asset and current liability accounts noted.

a$.$ Using the information given, calculate any change in net working capital that is expected to result from the proposed replacement action.

b$.$ Explain why a change in these current accounts would be relevant in determining the initial cash flow for the proposed capital expenditure.

c$.$ Would the change in net working capital enter into any of the other cash flow components that make up the relevant cash flows? Explain.