Many capital projects require increases in net working capital. Which of the following would be included in the net working capital requirements of a capital project?
A)Machinery and equipment
B)Accounts receivable and accounts payable
C)Long term debt
D)Fixed assets net of depreciation
E)All of the above would be included in net working capital requirements.

Question

Quizplus · Accepted Answer

Net working capital includes current assets (such as accounts receivable) and current liabilities (such as accounts payable). Machinery and equipment and fixed assets net of depreciation are not included in net working capital requirements. Long term debt is a financing activity and not a component of net working capital.

Many Capital Projects Require Increases in Net Working Capital