Examlex

Solved

Changes in Net Working Capital Do Not Need to Be

question 94

True/False

Changes in net working capital do not need to be considered in capital budgeting cash flow analysis as long as the nominal (undiscounted)values of the changes are identical in each time period.


Definitions:

Useful Life

The estimated time period that an asset is expected to be usable for its intended purpose.

Equipment Cost

The total amount spent to acquire, install, and prepare equipment for its intended use, including purchase price and associated expenses.

Periodic Depreciation

The allocation of the cost of a tangible asset over its useful life in a periodic manner, typically done for accounting and tax purposes.

Plant Assets

Long-term tangible assets that are used in the production of goods or services, such as buildings, machinery, and equipment.

Related Questions