From my understanding and from reading the book, when computing changes in NWCInv for purposes of FCFE we do not include cash and cash equivalents.
Please correct me if I am wrong.
But for some reason, the answer to this following problem includes cash (pg 351):
Current assets (includes $5 cash in 2007 and 2008) 2007 = 201 and 2008 = 326
Current liabilities (all non-int bearing) 2007 = 57 and 2008 = 141
Solution page 365 Investment in WC = 41
Can anyone help explain why this problem includes cash?