1. avatar says

    the initial working capital requirement in year zero will fall under the investment phase, so will the subsequent working capital requirements be under the same investment phase or return phase? thank you in advance,

    • Profile photo of John Moffat says

      That is a very good question :-)

      I think that if they do occur, then best for the exam is to treat them as part of the return phase (although I am sure that if they were relevant then the examiner would allow it either way).

  2. avatar says

    What if the tax payable/refundable is on arrears basis, in which case, in this example, these cash flows will fall into the 6th year. Is the life of the project then 5 years or 6 years?

  3. avatar says

    I have a query:
    What if any of the cash flows are negative? So you will have the initial investment and then cash inflows over the years. Say for example, Year 2 makes a negative cash flow, then will that cash flow be considered in PV of return or investment?

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