The change in net working capital is always positive,meaning more working capital is required,for projects considered in capital budgeting because all projects are either expansion projects or replacement projects which have expansion effects.

Question

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The change in net working capital can be positive or negative depending on the nature of the project. Expansion projects may require an increase in working capital, leading to a positive change, while replacement projects may not require additional working capital, leading to a negative change or no change at all.

The Change in Net Working Capital Is Always Positive,meaning More