Question
A project requires additional accounts receivable of $1,100,000 and additional inventory of $550,000. It results in additional accounts payable of $940,000. Net working capital will
A project requires additional accounts receivable of $1,100,000 and additional inventory of $550,000. It results in additional accounts payable of $940,000. Net working capital will return to its normal level following the 4-year project.
What is the effect on the NPV of the project solely due to this investment in net working capital, assuming a 12% required rate of return?
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Advanced Accounting
Authors: Gail Fayerman
1st Canadian Edition
9781118774113, 1118774116, 111803791X, 978-1118037911
