Net Working Capital Is Expected to Increase by $25,000 in Year

question 54

Multiple Choice

Net working capital is expected to increase by $25,000 in year 5 of a project.If this extra working capital is recovered when the project ends in year 6,what is the effect on the project's net present value,if the cost of capital is 15%?

• A) NPV will not be affected because the $25,000 will all be recouped.
• B) NPV will increase by $12,429.42.
• C) NPV will decrease by $25,000.
• D) NPV will decrease by $1,621.23.

---

Definitions:

Personality Characteristics

Traits and qualities that form an individual's distinctive character, such as openness, conscientiousness, extraversion, agreeableness, and neuroticism.

Traits

Characteristic features or qualities that define an individual or thing, often used to describe personality.

Enduring Dimensions

Long-lasting aspects or characteristics of an individual's personality or a particular situation.

Psychosocial Development

The process of changes in an individual's psychological and social functioning over the lifespan, based on Erik Erikson's theory.