# Step-by-Step Solution First, recall that **working capital** is calculated as: \[ \text{Working Capital} = \text{Current Assets} - \text{Current Liabilities} \] **Current assets** include inventory and accounts receivable. The problem does not mention cash or other current assets, so we'll use only what's given: $735 (inventory) + $220 (accounts receivable) = $955$. **Current liabilities** are represented here by accounts payable, which is $315$. So, \[ \text{Working Capital} = \$955 - \$315 = \$640 \] However, the question states that the firm has \$95 in working capital. This suggests that either there are other unlisted current liabilities or perhaps the question is asking how much more working capital is needed, but the typical interpretation is to calculate based on the given numbers. Looking at the multiple-choice options, none match \$640 or \$95. Let's check if the question is actually asking for total assets. **Total assets** would be: \[ \text{Total Assets} = \text{Inventory} + \text{Accounts Receivable} + \text{Fixed Assets} = \$735 + \$220 + \$1,180 = \$2,135 \] Again, this does not match the choices. If the question is actually "How much working capital does the firm have?" the answer should be \$640, but this is not one of the choices. Let's re-examine the choices: - $1,915$ - $735$ - $1,050$ - $865$ - $1,365$ Let's try to see if any combination of assets minus liabilities matches these choices. If we sum only inventory and accounts receivable and subtract accounts payable: \[ \$735 + \$220 - \$315 = \$640 \] Still not matching. If we add in fixed assets: \[ \$735 + \$220 + \$1,180 - \$315 = \$1,820 \] Still not matching. Alternatively, maybe the question is just asking for inventory, which is \$735, and that is one of the answer choices. If it's asking for net working capital (current assets - current liabilities), the answer is \$640. Since the question says "working capital," and the only matching answer is \$735, which is inventory, but that's not working capital. Given the data and standard definitions, the correct calculation for working capital is \$640. However, since the closest answer is \$735 (inventory), and none of the other numbers fit, the question may have a typo or missing information. # Final Answer **Based on the standard definition, the firm's working capital is \$640, but this is not one of the provided answer choices. If you must choose from the given options, none are correct based on the data and standard formula for working capital.**