Answer (D) is correct . Net working capital is the excess of current assets over current liabilities. An increase in current assets or a decrease in current liabilities increases working capital. Thus, net working capital increased by $170,000 ($120,000 + $50,000).
Answer (A) is incorrect because Both the increase in current assets and the decrease in current liabilities increase working capital.
Answer (B) is incorrect because Net working capital did change.
Answer (C) is incorrect because Net working capital increased.
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