Evaluate the following statement: Terminal-year free cash flows may differ from the cash flows provided in the typical year of a project for reasons such as the return/repayment of increases/reductions in additional working capital in the prior years.

Question

Quizplus · Accepted Answer

Terminal-year free cash flows can be affected by changes in working capital, which could have been made in prior years, resulting in a difference from the cash flows provided in the typical year of the project. Therefore, the statement is true.

Evaluate the Following Statement: Terminal-Year Free Cash Flows May Differ