Which of the Following Statements Regarding Investment in Working Capital

question 29

Multiple Choice

Which of the following statements regarding investment in working capital is incorrect?

• A) An investment in working capital, unlike an investment in plant and equipment, represents a positive cash flow when the investment is made.
• B) Net working capital cash flow is measured by the change in working capital, not the level of working capital.
• C) Net working capital may change during the life of a project.
• D) Working capital is generally recovered at the end of a project.

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Definitions:

Human Capital

The economic value of the skills, experience, and qualifications of an individual worker or group of workers.

Seed Drill

An agricultural tool that sows the seeds for crops by positioning them in the soil and burying them to the correct depth, ensuring that seeds are distributed evenly and at optimal depths.

Experience

The knowledge or mastery of an event or subject gained through involvement in or exposure to it.

Productivity

The measure of the efficiency of production often calculated as the ratio of outputs produced to inputs used in the production process.