Question
Your company's boss asked you to estimate the cash flows relevant to a new investment opportunity. In particular, he wants you to focus on Net
Your company's boss asked you to estimate the cash flows relevant to a new investment opportunity. In particular, he wants you to focus on Net Working Capital and how it may need to be adjusted for each year of the proposed investment project. Here's the summary of your estimates: If accepted, the 3-year project would require an immediate investment of $20,000 into the Net Working Capital (NWC). It would be necessary to increase the Net Working Capital by $4,000 in each subsequent year of the project. You then summarized the results for your boss as follows: (Find change in NWC in year 0-year 3)
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