working capital exam sept/dec 15 question 5?

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June 9, 2016 at 6:55 pm #321668
piero980
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HI,

Why is working capital not released? It really confuses me as in the book all the TYU i came across had working capital that was eventually released.

Is there anything in the question that suggests us that we do need to calculate working capital differently?

Thanks
June 10, 2016 at 6:11 am #321822
John Moffat
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It is because the machine will be replaced in 4 years time and so the examiner has assumed that the working capital will continue to be needed.
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