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John Moffat.
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aneela1989
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When there is outflow initially and it is recovering it over the estimated life but at the end it is necessary that all of wc investment will be recovered or we assume it????
John Moffat
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I don’t know what you mean by ‘recovering it over the estimated life’.
An outflow is needed initially to finance the extra inventory, receivables etc. needed as a result of the project. The level needed might change during the life of the project. At the end of the project we assume (unless the questions says otherwise) that we no longer need the extra inventory etc. and that therefore the working capital is recovered.
I do suggest that you watch our free lectures. They are a complete course covering everything you need to pass F9.
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