When discounted cash flow methods of capital budgeting are used, the working capital required for a project is ordinarily counted as a cash outflow at the beginning of the project and as a cash inflow at the end of the project.

Question

Quizplus · Accepted Answer

This is because the initial investment in working capital is considered a cash outflow, but the release of that working capital at the end of the project is considered a cash inflow.

When Discounted Cash Flow Methods of Capital Budgeting Are Used