Return of Net Working Capital (NWC)

CFA Level II Corporate Finance
#1

When projecting capital budgeting cash flows, one of the positive terminal cash flows is “Return of Net Working Capital”. Can someone give a real-world example of net working capital being returned?

#2

Maybe you had to buy inventory or machinery or something at the beginning of the project; at the end it is sold.

#3

Thanks for the answer. Selling leftover inventory makes sense, but what kind of machinery would be considered working capital?

#4

I was just spitballing; you’re correct: machinery probably wouldn’t qualify.

Sigh.

#5

Unless you are a machinery dealer :stuck_out_tongue:

#6

Outside the box!

Touché!