Project component how to calculate net working capital

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Reference no: EM13754201

1. Recalling from our second class session and the first project component how to calculate net working capital. Any investment (increase) in net working capital is considered a cash outflow, while any use (decrease) of net working capital is considered a cash inflow. With that in mind, what are the cash flows generated by each of the three following items?

a. Accounts receivable fall by $1,000.

b. Inventories increase by $500.

c. Accounts payable increase by $2,000.

2. If equipment obtained exclusively for a project has a salvage value as of the end of the project, how will this affect cash flows? (Hint: the answer is NOT that there will be no effect.)

Reference no: EM13754201

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