A new project would require an immediate increase in raw materials in the amount $6,000. The firm expects that accounts payable will automatically increase $2,000. How much must the firm expect its investment in net working capital to increase if they accept this project

The project will increase the net working capital of the firm by $4000

Explanation:

Net working capital measure how fast a company can convert its asset to cash, the networking capital can be obtained with the expression below;

net working capital (NWC) = current assets - current liabilities

Current asset = Increase in raw materials = $6,000

Current liabilities = accounts payable increase = $2,000

NWC = Increase in raw materials-increase in accounts payable

=$6,000 - $2,000

=$4000

Therefore this project will increase the net working capital of the firm by $4000