How Is Working Capital Needed in the Operations of Investments

question 59

Multiple Choice

How is working capital needed in the operations of investments treated in discounted cash flow analysis?

• A)added to cost of the investment
• B)added to cash inflows when recovery occurs
• C)both a and b
• D)none of the above

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Definitions:

Video Game Rental

A service that allows consumers to borrow video games for a limited period of time in exchange for a fee.

Marginal Utility

The additional satisfaction a consumer gains from consuming one more unit of a good or service.

Movie Rental

A service that allows consumers to temporarily access films for a fee without purchasing them outright.

Marginal Utility

The extra pleasure or advantage (utility) a person receives from using an additional unit of a product or service.