Question

What is the Increase in Working Capital in Year 2?

	At the end of year:
	0	1	2	3	4	5
Inventory	30	33	36	40	40	40
Accounts Receivable	20	22	24	26	26	26
Accounts Payable	15	17	19	21	21	21

Answer 1

Increase in working capital in year 2
Increase in Inventory ($36-33)	$             3
Increase in account receivables ($24-22)	$             2
Less:
Increase in account payable (19-17)	$             2
Increase in working capital	$             3