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How and why does working capital influence the incremental cash flow estimation for a planned large capital budgeting project? Explain.

Many large projects need additional working capital. This investment in additional working capital turns into a part of the initial investment. This investment is recovered at the ending of the project’s life. There may be some spontaneous raise in current liabilities related with a project, although the change in net working capital, if any, is similarly to be a positive value requiring an increase in the initial investment of that amount.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M9543943

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