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In the fifth paragraph of the question says:
The working capital will be increased annually at the start of each of Years 2 to 4 by the inflation rate and is fully recoverable at the end of the project’s life.The answer shows:
There is $41,000 cash outflow of working capital in Year 1 after adjustment of 4% of inflation rate.My question is:
In the fifth paragraph states the adjustment is at the start of each of Years 2 to 4, why is the adjustment also made in Year 1?Thanks
I found out the answer to my question. it’s “Start” of each of Years 2 to 4.
Anyway, thanks.
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