If an Investment in a New Asset Results in a Change

question 23

True/False

If an investment in a new asset results in a change in current assets that exceeds the change in current liabilities, this change in net working capital represents an initial cash outflow.

---

Definitions:

Trade Discounts

Reductions in price given by sellers to buyers in the commercial transactions, typically based on volume or frequency of orders.

Net Price

The final price after all discounts, rebates, and deductions have been applied, but before taxes and additional fees.

Complement Rate

In finance, it usually refers to the difference between 100% and the given rate of interest, used to calculate discount or markup rates.

Net Price

The final price after any discounts, rebates, or other deductions have been applied.