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Hello John,
I pray you are well.
I’m working on the ATC question, got most of the numbers correct but have failed to decipher how the working capital in year 5 was got.
I made an assumption that in the last year the units sold are 95,000 at $1469 giving me $139,555 with 10% Working capital = 13,956
Can you please explain how the working capital in yr 5 ($13,670) is obtained?
Many thanks
We always assume (as in Paper F9) that at the end of a project the working capital is no longer needed and is therefore recovered (i.e. an inflow).
The 13,670 is the total of the working capital outflows in the previous years.
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