Pass paper Sept/Dec 2015: NPV - increase in working capital

The reason is that the question says that the machine will be replaced. Therefore production will still continue and therefore working capital would still be needed (and therefore not recovered). However, the examiner did say after this exam that full marks would be given if you had recovered the working capital. I do mention this point in my free lectures. The lectures are a complete free course for Paper F9 and cover everything needed to be able to pass the exam well.