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Sir,
If the question states that
” initial investment in working capital of $500,000 will be required.
Investment in working capital will be subject to the general rate of inflation, which is expected to be 4·7% per year.”as it is not mentioning here about whether it will be recovered or not, so we should assume that it will be recovered at the end??
Thank you
We always assume that working capital is recovered at the end of the project, unless either the question says differently, or unless the question says that the machine will be replaced (in which case the working capital will still be needed).
Have you not watched my free lectures on this? The lectures are a complete free course for Paper F9 and cover everything needed to be able to pass the exam well.
I have watched out your lectures but I guess I missed out this point.
Thank you for making it clear to me 🙂
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