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referring to Q1 June 2013, there’s initial outflow of $500k in year 0. but at the end, in year 4, there’s no inflow of 500k + inflation of the working capital.
however, in Q1 Dec 2011, there’s an initial outflow of $90k. and in the end year 5, there’s an inflow of 90k.
How do i know whether the initial outflow of WC will be recovered, i mean whether to include or not?
I had exactly the same question last week, so if you scroll down to my post you’ll see the answer (entitled June 2013 exam, question one). Basically it’s because it’s an ongoing project, but you wouldn’t have lost marks if you’d recovered working capital.
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