How & why does working capital affect incremental cash flow, Financial Management

Assignment Help:

How and why does working capital affect the incremental cash flow estimation for a proposed large capital budgeting project?  Explain.

Several large projects require additional working capital.  This investment in additional working capital develops into part of the initial investment.  This investment is recovered in the last part of the project's life.  There may be some impulsive increase in current liabilities associated with a project however the change in net working capital, if any, is probable to be a positive value requiring an increase in the initial investment of that amount.

 


Related Discussions:- How & why does working capital affect incremental cash flow

Define risk relate with large amount of short term financing, What are the ...

What are the risks related with using a large amount of short-term financing for working capital? Using a large amount of short-term financing usually permits funds to be raised

Weighted verage, #questi Saven Travel Corporation is considering several in...

#questi Saven Travel Corporation is considering several investment opportunities in order to diversify its operations. Mr. Saven, president, is trying to determine the firm''''s co

Describe the techniques of gantt charts, Due to the complexity of the tasks...

Due to the complexity of the tasks involved in many projects, communication of responsibility for those tasks is often helped by means of graphical planning techniques.

Fundamental ingredients of management of working capital, Fundamental ingre...

Fundamental ingredients of Management of working capital Management of working capital has two fundamental ingredients: (1) an overview of working capital management as a wh

Explain the internalization theory of fdi, Normal 0 false fal...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Cash flow statement, Given below are the cash flows of a project. Find out ...

Given below are the cash flows of a project. Find out the net present value of the project. Cost of capital is 18% and initial investment is Rs. 2,00,000. Year Cash Flows (lakhs)

Determine the concept of dividend yield, Dividend yield Dividend yield ...

Dividend yield Dividend yield = (Dividend per share/Market share price) x 100% Dividend yield is the cash return on the share (not whole return which is cash dividend and ca

Main characteristics of the resource-based approach, Z Company is very succ...

Z Company is very successful as market leader in digital media products where it has demonstrated its ability to innovate in new product development and design at a very fast pace,

Functions of treasurer, Functions of Treasurer:- (1) Cash Management: -...

Functions of Treasurer:- (1) Cash Management: - It comprises the managing of cash receipts and cash payments of the business. (2) Banking Relations: - It comprises operating

Option-adjusted spread (oas) - total return, The horizon price ...

The horizon price can be determined by incorporating Option-Adjusted Spread (OAS) into a total return analysis. But this requires a valuation mo

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd