When additional funds must be committed to working capital, those funds are assumed to be recovered at the end of the project's life.

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Working capital is the amount of money needed to cover the day-to-day operations of a business. When additional funds are committed to working capital for a project, it is assumed that these funds will be recovered at the end of the project's life because the project will generate revenue and profits that can cover the initial investment. This assumption is based on the idea that the project will be successful and generate cash inflows that can be used to pay back the working capital investment. However, this assumption is not guaranteed, and there is always a risk that the project may not generate enough cash flow to recover the initial investment.

When Additional Funds Must Be Committed to Working Capital, Those