In Capital Budgeting,it Is Common Practice to Assume Any Net

question 57

Essay

In capital budgeting,it is common practice to assume any net working capital required by a project will be recouped at the end of the project.What is the basis for this assumption?

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Definitions:

Gross Amount

The total amount before any deductions, such as taxes, expenses, or discounts, are subtracted.

Trade Receivables

Trade receivables are amounts due to a business for goods sold or services provided on credit terms to customers.

Formal Instrument

A legal document expressing an agreement, obligation, or right enforceable by law.

Note Receivable

A financial asset representing a written promise for the repayment of a specific amount of money, plus interest, by a debtor to the lender at a future date.