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Change in net working capital calculation Samuels Manufacturing is considering the perchase of a now machine to replace one it believes is obsolole. The firm
Change in net working capital calculation Samuels Manufacturing is considering the perchase of a now machine to replace one it believes is obsolole. The firm has total curent assets of $960.000 and total current liablitios of $640.000. As a result of the proposed roplacement, the following changos are anticipatod in the lovels of the curent assot and current liabeity acoounts notod. a. Using the information given, calculate any change in net working capital that is eapected to result from the proposed replacement action. b. Explain why a chango in these current acoounts awould be relevart in defermining the initial cash fow for the proposed capital expenditure. c. Would the change in net working capedal enter into any of the other cash flow components that make up the relevant cash flows? Explain
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