Choice "C" is correct. Net working capital is the difference between current assets and current liabilities. Because current assets went up $120,000 and current liabilities down by $50,000, the net effect is an increase in net working capital of $170,000.For example: | Before
change
| Change
| After
Change
|
|---|
Currect assets | $ 500,000 | $ 120,000 | $ 620,000 | Current liabilities | 300,000 | (50,000) | 250,000 | | Net working capital | $ 200,000 | | $ 370,000 |
Therefore, working capital has increased $170,000.Choices "a", "d", and "b" are incorrect, per the above calculation.
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