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Pan American Airways is a financially distressed international airline that struggled to attract customers in 2019. To boost their revenues, Pan Am decided to
Pan American Airways is a financially distressed international airline that struggled to attract customers in 2019. To boost their revenues, Pan Am decided to offer long-term financing in 2020. The company generated an additional $2.5 billion in revenues that year through accounts receivable. The airline also spent $2.5 billion in cash to stock up on inventory (the company is decreasing the cash that it already had to buy the inventory). All else being equal, what is the change in net working capital in 2020? $5 billion -$2.5 billion -$5 billion $2.5 billion No change
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