Mathematics · Financial Management
A company is considering a project with a three-year life. Sales revenue is forecast to be $400,000 in Year 1, rising by 10% per year thereafter. The company requires working capital at the start of each year equivalent to 12% of that year's sales revenue. All working capital is recovered at the end of the project. What is the relevant working capital cash flow to be included in the project appraisal for Year 2 (Time 2)?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1$48,000 outflow
- 2$5,280 inflow
- 3$5,280 outflow
- 4$4,800 outflow✓
Correct answer
$4,800 outflow
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