--%>
Assignment Help - homework help

Influence of working capital in the incremental cash flow

How and why does working capital influence the incremental cash flow estimation for a proposed large capital budgeting project? Describe.
Several large projects need additional working capital. This investment in additional working capital becomes portion of the initial investment. This investment is recovered at the ending of the project's life. There may be some spontaneous raise in current liabilities related with a project, however the change in net working capital, if any, is likely to be a positive value requiring an raise in the initial investment of that amount.

   Related Questions in Finance Basics

  • Q : Explain Appropriation Appropriation :

    Appropriation: The authorization for a particular agency to make expenditures or make obligations from a particular fund for a particular purpose. It is generally limited in amount and period of time during which the expenses is to be

    		•
  • Q : Cyclical unemployment Suppose that in a

    Suppose that in a specific year the natural rate of unemployment is 5 percent and the actual rate of unemployment is 9 percent. Employ Okun's law to fin out the size of the GDP gap in percentage-point terms. If the nominal GDP is $500 billion in that year, how much ou

    		•
  • Q : Advantages-disadvantages of internal

    Describe advantages and disadvantages of the internal rate of return method? The internal rate of return method is discounted cash flow method and number expressed like a percentage. Typically these are seen as advantages. The main disadvantag

    		•
  • Q : Examples of high operating leverage

    Give two instances of types of companies likely to contain high operating leverage. Give examples. Long distance telephone companies & electricity generating companies are likely to contain operating leverage. These two kinds of companies

    		•
  • Q : What is the efficiency factor Normal 0

    Normal 0 false false

  • Q : Define Price Increase Price Increase :

    Price Increase: Budget adjustment to reflect the inflation factors for particular operating expenses constant with the budget instructions from the Department of Finance.

    		•
  • Q : Multiplier effect Normal 0 false false

    Normal 0 false false

    		•
  • Q : Problem of time lags in enacting and

    Normal 0 false false

  • Q : Mergers encourage the formation of new

    Do mergers encourage the formation of new banks? Yes. The increase in the number of new banks in the second half of the 1990s coincides with a surge in merger activity in the similar period. A study conducted through the Federal Reserve Bank of

    		•
  • Q : Define Subcommittee Subcommittee : The

    Subcommittee: The smaller groupings into which the Senate or Assembly committees are frequently divided. For illustration, the fiscal committees which hear the Budget Bill are classified into subcommittees usually by departments or subject area (examp

    		•