How Does Net Working Capital Affect the NPV of a Five-Year

question 127

Multiple Choice

How does net working capital affect the NPV of a five-year project if working capital is expected to increase by $25,000 and the firm has a 15% cost of capital?

• A)NPV will increase by $9,322
• B)NPV will increase by $12,571
• C)NPV will decrease by $25,000
• D)NPV will decrease by $12,571 t_o-$25,000 outflow
• T₅-inflow, which has a present value of $12,429.42 (25,000/1.15⁵)

---

Definitions:

Approaches

Different methods or perspectives used to understand and study psychological phenomena.

Trained Introspection

A method in psychology where trained observers examine and report on the content of their own thoughts.

Structuralism

An early school of psychology that sought to understand the structure of the mind by analyzing the basic elements of thoughts and sensations.

Psychology

The scientific study of the mind and behavior, examining how individuals think, feel, and act.