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September 4, 2014 at 10:14 am
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,
John Moffat says
September 4, 2014 at 10:40 am
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).
September 26, 2015 at 1:43 pm
As we know working capital requirements in subsequent years can change in either way as increase or reduction, what if increase in working capital(outflow ) is considered part of investment phase and decrease in WC as return phase. Will this approach be acceptable or is it plain wrong?
September 26, 2015 at 2:18 pm
I have answered this in my previous reply.
August 20, 2014 at 3:32 pm
Thanks a lot
August 20, 2014 at 3:43 pm
You are welcome
August 13, 2014 at 2:29 am
When you are calculating the net cash flows, where will the tax savings on capital allowances be considered in the investment phase or return phase?
August 13, 2014 at 5:20 am
They will be treated as part of the investment phase.
May 31, 2013 at 11:12 am
April 27, 2013 at 6:22 pm
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?
April 28, 2013 at 8:38 am
April 28, 2013 at 4:58 pm
September 29, 2012 at 3:06 pm
great and very helpful. very easy to understand and excellently explained
September 17, 2012 at 2:04 pm
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?
May 20, 2012 at 2:20 pm
very good and helpful
May 7, 2012 at 5:31 pm
thank you. well explained and easy to understand.
May 10, 2014 at 5:26 pm
There is not a lecture on Macauley’s duration.
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