Net working capital:

a. is the only expenditure where at least a partial recovery can be made at the end of a project.

b. can be ignored in project analysis because any expenditure is normally recouped by the end of the project.

c. requirements generally, but not always, create a cash inflow at the beginning of a project.

d. is frequently affected by the additional sales generated by a new project.

e. expenditures commonly occur at the end of a project.

Question

Elsa

Business

10 March, 17:13

Net working capital:

a. is the only expenditure where at least a partial recovery can be made at the end of a project.

b. can be ignored in project analysis because any expenditure is normally recouped by the end of the project.

c. requirements generally, but not always, create a cash inflow at the beginning of a project.

d. is frequently affected by the additional sales generated by a new project.

e. expenditures commonly occur at the end of a project.

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Answers (1)

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Williamson · Answer 1

D) is frequently affected by the additional sales generated by a new project.

Explanation:

Working is amount of amount of money required to finance the daily operation of a business. These represent the excess of current assets over current liabilities.

They are usually affected by the level of sales. The higher the amount of sales the higher the working capital required to sustain the operation. For a project appraisal, incremental working capital is to be considered and would be recouped at the end of the project period.