When evaluating a capital budgeting project, the change in net working capital must be considered as part of
A) the operating cash outflows.
B) the incremental operating cash inflows.
C) the initial investment.
D) the operating cash inflows.

Question

Quizplus · Accepted Answer

The change in net working capital is considered part of the initial investment because it represents additional funds needed to support the project, such as increased inventory or accounts receivable.

When Evaluating a Capital Budgeting Project, the Change in Net