Working Capital

541 views
User Avatar

Student/Article
31 Points Posted on 29 August 2011

HI,

With respect to FM (Capital Budgeting-CA FInal) would like to know the follwing  pertaining to Working Capital :

        1. when calculating the cash outflow why is it discounted only for the first year instead of the entire life of the project ?

         2. why is it considered as an inflow at the end of the life of the project ?

 

Looking forward for the help.

Thanks,

Varun

Reply Share Follow
On 29 August 2011 at 22:18 Report
Replies (2)
User Avatar

Expert
6394 Points Posted on 30 August 2011

Cash outflow at the begining is like investment such as fixed asset which is realized at the end of the business, so the money will back and treated as inflow.

Reply
On 30 August 2011 at 13:14
User Avatar

Student/Article
31 Points Posted on 30 August 2011
Hi, Thank you Mr Bijoy. However, the cost of fixed asset is incurred once in its life time and then depreciated till sold at the end of life. as a result we get the money back. in case of working capital the sum needs to be invested every year as a result we need to discount it every year but we dont do that. Hence request you to expedite. Looking forward for an explaination. Thanks, Varun
Reply
On 30 August 2011 at 14:38

Leave a Reply

Post Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Recent Topics :

  1. TDS ON PF FORM 19 WITHDRAWAL
  2. Can a virtual office in Mumbai be used for company
  3. Eway and e invoicing in condition where 4 party ar
  4. Bank balance in ITR-3
  5. INCLUDING PROFITS FROM REIT / INVIT IN SHARE TRADI
  6. Tempsens Instruments IPO GMP Allotment Listing dat
  7. Upload Type - Correction. Not showing in TDS filli
  8. Partnership tax audit query
  9. ERROR SHOWING PARTNER REMUNERATION ITR 3 TIME OF V
  10. Form 146 foreign remittance us citizen

More recent discussions | Post

Related Topics :

Loading