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Sir,
I need ur a lil bit help in the working of working capital.
I am not getting y they did not rounded it off in yr 1 nd yr 2 while they did so in yr 3&4.If I am not wrong the working goes on in this way:
$150,000*5%+ =157,500
that shows an increment of $7,500.Thank you
The rate of inflation is not 5% – it is 4.7%.
So at time 1, the incremental WC is 150 x 4.7% = 7.050. The examiner has rounded to the nearest thousand which is normal.
At time 2, it should be 157 x 4.7% = 7.379. Again he has rounded to the nearest thousand.
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