The recovery of an additional investment in working capital is assumed to:
A) occur at the end of a project's life.
B) occur at the beginning of a project's life.
C) occur whenever the project first shows a profit.
D)be a sunk cost.

Question

Quizplus · Accepted Answer

The recovery of an additional investment in working capital is assumed to occur at the end of a project's life, as it represents the return of the initial working capital investment made at the start of the project. This recovery is not considered a profit, but rather a return of capital, and is factored into the project's cash flow statement as a negative cash outflow followed by a positive cash inflow. Therefore, option A is the best choice.

The Recovery of an Additional Investment in Working Capital Is