In capital budgeting, the investment in net working capital shows the difference between the sum of inventories, trade receivable, less trade and other payables.

Question

Quizplus · Accepted Answer

In capital budgeting, the investment in net working capital is indeed calculated as the difference between current assets (such as inventories and trade receivables) and current liabilities (such as trade and other payables). This reflects the additional funds needed to support the project's day-to-day operations.

In Capital Budgeting, the Investment in Net Working Capital Shows