Question
Consider the following statements about the investment in working capital in a capital budgeting analysis: I. Working capital often increases as the result of higher
Consider the following statements about the investment in working capital in a capital budgeting analysis: I. Working capital often increases as the result of higher balances in accounts receivable or inventory necessary to support a project. II. Working capital increases are sources of cash and should be included in a discounted-cash-flow analysis. III. The time 0 cash investment in working capital is included in a discounted-cash-flow analysis as a cash outflow. Which of the above statements is (are) correct?
I only.
II only.
III only.
I and II.
I and III.
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