Question

Pick the correct statement related to net working capital from below. Multiple Choice Net working capital can be ignored in project analysis because any expenditure is normally recouped at the end of the project. Net working capital requirements, such as an increase in accounts receivable, create a cash inflow at the beginning of a project. Net working capital is rarely affected when a new product is introduced. Net working capital can create either an initial cash inflow or outflow. Net working capital is the only expenditure where at least a partial recovery can be made at the end of a project.

Answer 1

Net working capital is the only expenditure where at least a partial recovery can be made at the end of a project.

Step-by-step explanation:

Net working capital is the difference between current assets and current liabilities. Net working capital measures a company's liquidity.

In project analysis, net working capital is part of the cost. It is usually subtracted from cash inflows.

Net working capital is a cash outflow.

Net working capital is the only expenditure where at least a partial recovery can be made at the end of a project.