FASTOUT Corporation is an automation company that invests heavily in research and development (R&D) before introducing any
Question:
FASTOUT Corporation is an automation company that invests heavily in research and development (R&D) before introducing any new machine, which are mostly innovative labour saving alternatives. Manufacturing firms in the industry are customers of FASTOUT Corporation. Recently, FASTOUT spent $130,000 to innovate an automatic food processing machine AFP20 to reduce wastage; however, the machine AFP20 is not fully ready yet for the market due to its occasional imperfection in separating residue and fine output, as reflected in a few random trial runs. Such infrequent failures require long reset time. The amount $130,000 would be taken as a net working capital or else it should be ignored in the case study in the calculation of cash flow statement?