The data above shows the net working capital requirements for Flinder's Camping, a company that makes tents. All figures are in thousands of dollars. What are Flinder's temporary working capital needs in the quarter in which they are greatest?
A) $390,000
B) $510,000
C) $720,000
D) $1,111,000

Question

The data above shows the net working capital requirements for Flinder's Camping, a company that makes tents. All figures are in thousands of dollars. What are Flinder's temporary working capital needs in the quarter in which they are greatest?
A) $390,000 
B) $510,000 
C) $720,000 
D) $1,111,000

Quizplus · Accepted Answer

Flinder's temporary working capital needs are calculated by subtracting the minimum net working capital requirements from the maximum net working capital requirements. In this case, the maximum net working capital requirement is $1,300,000 (Q1), and the minimum net working capital requirement is $580,000 (Q4). Therefore, the temporary working capital needs in the quarter in which they are greatest are $1,300,000 - $580,000 = $720,000. Therefore, the correct answer is option C.

The Data Above Shows the Net Working Capital Requirements for Flinder's