Net Working Capital Should Be Considered in Project Cash Flows

question 53

Multiple Choice

Net Working Capital should be considered in project cash flows because:

• A) Firms must invest cash in short-term assets to produce finished goods
• B) They are sunk costs
• C) Firms need positive NPV projects for investment
• D) None of the above

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Definitions:

Cycle Time

The total time from the beginning to the end of a process, including process time and any delays, indicating the speed at which outputs are produced from inputs.

Workstations

Designated areas in a manufacturing or office setting where specific tasks are performed, often outfitted with necessary tools and equipment.

Task Times

The duration required to complete specific jobs or assignments in a production or work process.