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f9- Technical Article: ADVANCED INVESTMENT APPRAISAL

This topic has 1 reply, 2 voices, and was last updated 9 years ago by John Moffat.

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May 18, 2015 at 7:13 pm #246945
mayfikry
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Hello,
So i basically understood the whole question. But in the working capital computation i dont understand how he came to the figure of working capital cashflow for year four as 2.1.
Mind you looking at it an explaining me how?
Thanks in advance
Link to the article: https://www.accaglobal.com/pk/en/student/exam-support-resources/fundamentals-exams-study-resources/f9/technical-articles/advanced-investment-appraisal.html
May 18, 2015 at 9:18 pm #246993
John Moffat
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At time 3, the level of working capital is 11.7. However at time 4, they only need working capital of 9.6. So the working capital reduces and therefore the difference (11.7 – 9.6) is recovered and there is therefore an inflow of the difference of 2.1.
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