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For project A, the cash flow effect from the change in net working capital is expected...

For project A, the cash flow effect from the change in net working capital is expected to be -500 dollars at time 2 and the level of net working capital is expected to be 1,900 dollars at time 2. What is the level of current assets for project A expected to be at time 1 if the level of current liabilities for project A is expected to be 5,000 dollars at time 1?

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Answer #1

NWC at Time 1 = NWC of Time 2 - Change

= $ 1900 - $ -500

= $ 2400

NWC of Time 1 = Current Assets1 - Current Liabilities

2400 = CUrrent Assets - $ 5000

Current Assets = $ 2400 + $ 5000

= $ 7400

Pls comment, if any further assistance is required.

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