EoC. Q13. Why should we not deduct $5 cash if it is a part of both the years’ current assets, while computing NWInv?
the cash balance doesn’t change (which is extremely unlikely in real life scenarios), therefore excluding or including cash in WCInv yields the same results.
It says cash amount is included in both the years. And we don’t count cash in wcinv calculations. So why don’t we have to remove it?!
try calculating change in working capital including cash and excluding cash. you should always exclude cash, but in this case since the cash balance is equal for both years, it doesn’t matter whether you exclude or include.
I excluded and the answer includes it. Hence the question.