- This topic has 1 reply, 2 voices, and was last updated 9 years ago by
.
Viewing 2 posts - 1 through 2 (of 2 total)
- Posts
Dear Sir, this is related to Q1 June 2015.
Sir, if the question says ‘the working capital will need to be increase annually at the start of each next 3 years by inflation rate (assume inflation rate-year 1: 22%, year 2 :14.7% and year 3 onwards 9.8%) and will released at the end of the project life.’
Kindly explain how to calculate the increment in working capital .
Thank You.The initial working capital is 9600.
This needs to increase in the first year by 22%, so 22% x 9600 = 2112.
So the total working capital is now 9600 + 2112 = 11712.
This needs to increase in the second year by 14.7%, so 14.7% x 11712 = 1722
Same idea again in the third year, and then as usual all of the working capital is recovered in the 4th year.
Viewing 2 posts - 1 through 2 (of 2 total)
- You must be logged in to reply to this topic.