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Sir
investment appraisal
in the examiner’s answer, she has recovered the W.c at end of year 5
but I didn’t recover it
and my answer differs
will this cut my marks
and also tell me when I should recover w.c and when notYou should always assume that the working capital is recovered at the end of the project, unless the question specifically says different. You will lose a mark if you don’t.
(There has only been one question where the examiner did not recover it. It was because the machine involved was going to be replaced and he therefore assumed that the working capital would still be needed. However, he did say that marks would not be deducted if it had been assumed that the working capital was recovered, as is usually the case.)
I do suggest that you watch the free lecture on relevant costs for investment appraisal, where this is dealt with.
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