Okan sep 2019

1. Because the Y$ is quoted against 1 Pound. (It is explained in Chapter 22 of our free lecture notes and the free lectures that go with them.) 2. The working capital figures are as per the instructions in the question (which is the most common sort of way in both Paper AFM and in Paper FM). "At the start of every year, Project Alpha will require working capital. In the first year this will be 10% of the estimated year 1 sales revenue. In subsequent years, the project will require an increase or a reduction in working capital of 15% for every $1 increase or decrease in sales revenue respectively. The working capital is expected to be fully released when Project Alpha ceases." So at time 0 the working capital is 10% x 17,325 = 1,733. At time 1 it is 15% x (34,304 - 17,235) = 2,547 and so on :-)