Your sales manager advises you that most of the new product sales will be on credit. You calculate this will increase your working capital needs by $1,000 in year 1. How is this handled in your analysis?

• A.Working capital decreases your cash flow in year one and increases it in year 2.
• B.Working capital requires cash in year one and yields cash in the last year of the project.
• C.Working capital is an operating expense and can be ignored.
• D.Working capital only increases a project's value.