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Your firm has been in business for two years. In its first year, the firm ended with $227,000 of current assets, long-term assets of $143,000,
Your firm has been in business for two years. In its first year, the firm ended with $227,000 of current assets, long-term assets of $143,000, $70,000 in surplus cash, current liabilities of $52,000, and long-term assets of $68,000. At the end of the second year, current assets were $279,000, long-term assets of $195,000, surplus cash of $90,000, current liabilities of $62,000, and long-term assets of $78,000.
Prove that your firms change in net operating working capital (NOWC) = $22,000
This number in the WACC after tax means that:
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