Question
Additional net working capital need refers to the amount of funds a company requires to support its business operations during a specific period, beyond its
Additional net working capital need refers to the amount of funds a company requires to support its business operations during a specific period, beyond its current level of working capital. This additional capital may be needed to finance inventory, accounts receivable, and other short-term assets, as well as to meet its short-term obligations such as accounts payable, interest payments, and taxes. The additional net working capital need is calculated by subtracting the current level of working capital from the projected level of working capital needed to support future growth or changes in the business. The recapture of net working capital at the end of a project will__.
have no effect on the terminal year free cash flow because the net working capital change has already been included in a prior year. | ||
decrease terminal year free cash flow by the change in net working capital times the corporate tax rate. | ||
increase terminal year free cash flow by the change in net working capital times the corporate tax rate. | ||
increase terminal year free cash flow. |
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