Workman Company is considering a five-year project that requires a typical investment in working capital, in this case, $100,000. Consider the following statements about this situation:I. Workman should include a $100,000 outflow that occurs at time 0 in a discounted-cash-flow analysis.
II. Workman should include separate $100,000 outflows in each year of the project's five-year life.
III. Workman should include a $100,000 recovery of its working-capital investment in year 5 of a discounted-cash-flow analysis.
Which of the above statements is (are) correct?
A. I only.
B. III only.
C. I and III.
D. II only.
E. I and II.
Answer: C
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