R23 question

CFA Level II Corporate Finance
#1

Hi!

Could you please explain me following example. In reading 23, example 7, page 37

  1. we have a row for NWC investments by year. I couldn’t reach the same results.

  2. How did they come with such return of NWC?

Thank you in advance!

#2

“The initial investment in net working capital is $200,000. At the end of each year, net working capital must be increased so that the cumulative investment in net working capital is one-sixth of the next year ’s projected sales”.

Y1= 1500 /(200+50)=6

Y2= 1875 /(200+50+63)=6

And so on