Question

A company expects to need to increase their net working capital by $200,000 at the beginning of a potential project's life. By how much would this event affect the project's terminal cash flow at the end of its expected life if the company's tax rate is 40%?

Answer 1

Answer:

+$200,000

Explanation:

The networking capital increase would be  backed at the end of the project.

so, increase in net working capital result in positive cash flow  at end of the project.

Working capital invested at beginning would recoup at the end of the project.