Fundamentals of Corporate Finance (3rd Edition) (Pearson Series in Finance)
Fundamentals of Corporate Finance (3rd Edition) (Pearson Series in Finance)
3rd Edition
ISBN: 9780133507676
Author: Jonathan Berk, Peter DeMarzo, Jarrad Harford
Publisher: PEARSON
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Chapter 9, Problem 11P
Summary Introduction

Working capital: Working capital is the difference of current assets and current liabilities. Working capital measures performance of management and operating efficiency of the firm. Working capital measures the financial health of firm for short duration period.

It is calculated by the formula given below:

Fundamentals of Corporate Finance (3rd Edition) (Pearson Series in Finance), Chapter 9, Problem 11P

Cash flow: The inflows and outflows of cash in the firm is called cash flow. It changes the balance of cash in hand and bank.

To determine:

The cash flows associated with changes in working capital for first five year of investment.

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