What Effect Is Expected at the End of the Life

question 35

Multiple Choice

What effect is expected at the end of the life of a project that initially required a $20,000 increase in net working capital?

• A) The $20,000 must now be paid by the firm.
• B) The firm receives a $20,000 cash inflow.
• C) Taxable income is reduced by $20,000.
• D)No effects are expected because the $20,000 is now a sunk cost.

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Definitions:

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