Simple question hopefully
Initial cash flow for the below - My particular struggle is with NWC, and why the accounts payable is a positive cash flow!?
New Machine price 8,000
Shipping & Install 2,000
Sale price of old machine 6,000
Book value of old machine 2,000
Inventory increase if new machine is installed 3,000
Accounts payable increase If new machine is installed 1,000
Tax rate 25%
Any help appreciated… 
Are you asking why NWC would be 2,000?
Yes, I dont get why accounts payable increase is a positive cashflow.
Think of it in terms of cash flows.
Any money you owe to your vendors is money in your pocket until you actually pay off the account balance. It’s like an interest-free loan. Overall, an increase in A/P would increase your cash flow. So any money you spent on inventory in the example above is offset by the increase in A/P because you haven’t paid that amount yet.
Hope this helps.
NWC increases by $2,000 = $3,000 (inventory increase) - $1,000 (A/P increase).
Increases in operating assets (e.g., inventory, A/R, prepaid expenses) and decreases in operating liabilities (A/P, wages payable, taxes payable, unearned revenue) are uses of cash (decrease CFO), while decreases in operating assets and increases in operating liabilities are sources of cash (increase CFO). This is easiest to see if you calculate CFO using the indirect method.
In the indirect method, you start with net income. Think of this as pretending that everything on your income statement was a cash transaction: all sales are cash, all expenses are paid in cash, and so on. When you get to the statement of cash flows, you have to admit that it’s pretend, and you have to make the adjustments.
If A/R increases, that means that you had some sales on credit: you pretended that you’d gotten all cash, but you really didn’t, so you have to decrease CFO by that increase. If inventory increases, you paid cash for some stuff you didn’t sell, and you didn’t include that in the income statement, so you have to decrease CFO by that increase.
If A/P increases, you bought some stuff on credit, not using cash as you pretended, so you increase CFO by that increase. If wages payable or taxes payable or interest payable increases, the pretend cash expense on your income statement wasn’t paid in cash, so you undo that pretend cash outflow by increasing CFO by the increase in these accounts. If unearned income increases (you get a deposit from a customer), that’s an obvious increase to CFO.
If you think of it in this manner - what did I pretend was a cash flow on my income statement, and what adjustments do I have to make if I didn’t really get/use cash? - you’ll easily remember the source/use of cash for changes in working capital accounts.