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Initial Project Cash Flow

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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

A. I and II only
B. I and III only
C. II and IV only
D. I, II, and IV only
E. I, II, III, and IV

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Solution Summary

This solution identifies the correct initial project cash flow related to net working capital.

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  • BE, Bangalore University, India
  • MS, University of Wisconsin-Madison
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