How do changes in working capital affect project cash flows?

How do changes in working capital affect project cash flows?



Answer: Increases in NET WORKING CAPITAL, such as accounts receivable or inventory, are investments and, therefore, use cash. That is, they reduce the net cash flow provided by the project in that period. When working capital is run down, cash is freed up, so cash flow increases.

Comments

Popular posts from this blog

What is JAD and how are users involved? What are advantages and disadvantages of JAD?

JAD Advantages and Disadvantages

What are the three dimensions to business problems? Give an example of each.