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3. The yearly cash flow estimates of the Price Increase option (see Exhibit 5a) on the equipment decision ignore any possible working capital require-

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3. The yearly cash flow estimates of the Price Increase option (see Exhibit 5a) on the equipment decision ignore any possible working capital require- ments. That is, these estimates assume that no additional working capital is necessary. Is this a reasonable assumption to make? Defend your answer. NOTE: Working capital is defined here as A/R + INV A/P Accruals.

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