Explain why a decrease in Net Working Capital (NWC) results in a cash inflow to the firm. In capital budgeting situations where firms replace existing equipment, etc., would you expect to ever see changes in NWC? Why?

My answer, but it's not in-depth enough:

A decrease in NWC involves either a reduction in current assets, which generates cash or an increase in current liabilities, which involves someone giving the firm credit, thereby freeing up the shareholders cash for other things.