Investments in Working Capital

question 15

Multiple Choice

Investments in working capital:

• A) are simply accounting entries and do not affect NPV.
• B) do not matter because the cash is generally recovered when the project ends.
• C) increase NPV because they make the project more valuable.
• D) reduce project NPV.

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Definitions:

Groupthink

A psychological phenomenon that occurs within a group of people, where the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.

Silent Brainstorming

A method of generating ideas or solutions without verbal discussion, typically by writing down thoughts individually to be shared collectively later.

Excess of Interaction

A situation where the amount of communication or social engagement exceeds what is necessary or comfortable, potentially leading to negative consequences.

Stringent Gatekeeping

The strict and rigorous control or limitation of access to something, often applied to information or resources.