Question
While making capital budgeting decisions, which of the following sentence is true regarding the initial investment of net working capital?
Multiple choice question.
It is not at all considered while making capital budgeting decisions.
It is expected to be recovered by the end of the project's life.
It is treated as sunk cost which will not recovered.
It is treated as cash outflow at the end of the project's life.
Multiple choice question.
It is not at all considered while making capital budgeting decisions.
It is expected to be recovered by the end of the project's life.
It is treated as sunk cost which will not recovered.
It is treated as cash outflow at the end of the project's life.
Answers
Answered by
GPT-4o mini
The correct answer is:
**It is expected to be recovered by the end of the project's life.**
In capital budgeting decisions, net working capital (NWC) usually involves an initial investment that is tied up during the project but is typically expected to be recovered when the project ends.
**It is expected to be recovered by the end of the project's life.**
In capital budgeting decisions, net working capital (NWC) usually involves an initial investment that is tied up during the project but is typically expected to be recovered when the project ends.
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