In Capital Budgeting Analyses At Time 0 Firm Builds Up Inventory When Inventory

In capital budgeting analyses, at time 0 firm builds up inventory. When inventory increases, cash should drop (suppose use cash to pay), and current assets remain the same. Why the net working capital increases (indicating cash outflow)? I understood the cash outflow part, but not clear about the increase in net working capital.

Prof. Angela


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