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hello sir.
In some questions on investment appraisal, wic capital outflow in first years occurs followed by several years of inflow.
General story is that all working capital is added back at the end of the project/life of asset. But in some cases ”adding back” or inflow of working capital is spread over 2/3 years instead of only final year inflow.
Please check with me and tell me any reason why.
Thanks a lot sir. 3 days to go from now 🙂
P.S wanna be a price winner:)
When a questions says that working capital is to be a % of the following years sales revenue, then as the sales revenue increases or decreases from year to year then thee amount of the working capital needed will increase or decrease as well.
If the amount needed increases, then there will be an outflow needed of the extra. If the amount needed decreases then there will be an inflow of the difference.
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