All of the following are anticipated effects of a proposed project.Which of these should be included in the initial project cash flow related to net working capital?
I.an inventory decrease of $5,000
II.an increase in accounts receivable of $1,500
III.an increase in fixed assets of $7,600
IV.a decrease in accounts payable of $2,100

Question

Quizplus · Accepted Answer

The initial project cash flow related to net working capital includes changes in current assets and current liabilities. Therefore, I and II should be included as they are changes in current assets (inventory and accounts receivable), and IV should also be included as it is a change in current liabilities (accounts payable). III, on the other hand, is an increase in fixed assets and is not a change in net working capital, so it should not be included in the initial project cash flow related to net working capital.

All of the Following Are Anticipated Effects of a Proposed