In Project Analysis,which One of These Is a Common Assumption

question 34

Multiple Choice

In project analysis,which one of these is a common assumption regarding net working capital?

• A)Only changes in current assets are included in net working capital for project analysis purposes.
• B)The aftertax salvage value of an asset that is sold is included as a net working capital item.
• C)Net working capital will be returned to its preproject level at the end of a project.
• D)Increases in net working capital will be treated as a cash inflow.
• E)Any change in net working capital will only occur when a project commences.

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Definitions:

Derived Demand

The demand for a factor of production or intermediate good resulting from the demand for another good or service, such as the demand for steel being driven by the demand for automobiles.

U.S. Treasury Bonds

Long-term government debt securities issued by the U.S. Department of the Treasury, offering a fixed interest rate and guaranteed by the full faith and credit of the U.S. government.

Dog Groomer

A professional who provides cleaning and hygiene services for dogs, such as bathing, hair trimming, and nail clipping.

Product Demand

This term describes the consumers' desire and willingness to purchase a specific product or service at a given price within a specified time frame.