Question: Net working capital is current assets minus current liabilities. How does net working capital affect project cash flows? Net working capital captures a recovery of

  1. Net working capital is current assets minus current liabilities. How does net working capital affect project cash flows?

    1. Net working capital captures a recovery of cash flow so it is a cash outflow.

    2. Net working capital captures an investment in current assets so it is a cash inflow.

    3. Net working capital is typically an investment in current assets at the beginning of a project that is recovered at the end of the project.

    4. Net working capital is typically a recovery of current assets at the beginning of a project and a cash outflow at the end of the project.

    5. Net working capital can only affect the initial project cash flow.

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