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I was doing this question Hw Co which was of Inevestment Appraisal and In this the Working Capital was not reversed in the final year which we normally do what could be the reason for this?
The reason is that the question said that the machine would be replaced at the end of 4 years. Therefore presumably the product would continue to be made and therefore the working capital would still be needed.
(However, this was unusual and the examiner did say that people would not lose marks if they had recovered the working capital (even though obviously the answer would be different))
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