In Net Present Value Analysis, the Release of Working Capital

question 99

Multiple Choice

In net present value analysis, the release of working capital at the end of a project should be:

• A) ignored.
• B) included as a cash outflow.
• C) included as a cash inflow.
• D) included as a tax deduction.

---

Definitions:

Variable Costs

Costs that vary in direct proportion to changes in the level of production or sales volume.

Sales

Transactions involving the exchange of goods or services for money, contributing to a company's revenue.

Break-Even Point

The Break-Even Point is the level of production or sales at which total revenues equal total costs, resulting in no profit or loss for the business.

Sales Dollars

Sales dollars refer to the total revenue generated from goods or services sold by a company, expressed in monetary terms.