Sheweser note question: Corp Fin reading 28, Q4

ndzhai · February 21, 2009, 10:10pm

Guys, there must be some of you reading Scheweser here. I have a serious question regarding reading 28, corp fin, question 4 and 5. The formula and method is final year non-operating CF = sale value + NWCInv - AT sale proceed. but in this question, it subtract NWCInc. Any of you can understand why? Thanks

beingthatguy · February 21, 2009, 10:41pm

I just read the topic and if you are refering to NWCINV for non operating It would be deducted out because it wold be a cash inflow (getting money for the sale of an asset) and will free up some cash Read the bottom of page 14. I think that is the answer you are looking for

ndzhai · February 22, 2009, 1:15pm

Thanks. I didn’t notice the NVW reduction at the beginning. My original impression was that most companies would spend working capital rather than reduce at the beginning of implementation. This is a good question!