In net present value analysis, the release of working capital at the end of a project should be:
A) ignored.
B) included as a cash outflow.
C) included as a cash inflow.
D) included as a tax deduction.

Question

Quizplus · Accepted Answer

The release of working capital at the end of a project should be included as a cash inflow in net present value analysis. This is because working capital was invested at the beginning of the project and is now being recovered at the end of the project. Therefore, it should be treated as a cash inflow.

In Net Present Value Analysis, the Release of Working Capital