Question

You expect to sell 3000 units in year 1, 2000 units in year 2 , 4000...

You expect to sell 3000 units in year 1, 2000 units in year 2 , 4000 units in year 3, 2000 units in year 4. The price of each unit is $60 in year 1 and 2, $75 in year 3 and 4. The initial NWC is $12000. Find the change in NWC in each of the year. Find the amount of NWC which is returned back to the firm at the end of the life of project. NWC is 20% of sales revenues.

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