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Query--ARR

This query is : Resolved 

24 August 2010 Why working capital is added in calculation of Avg. investment in ARR method of capital budgeting?

Kindly explain with clear logic.

27 August 2010 Working capital is assumed to be recovered back at the end of the investment period by selling all inventory, collecting all debt and paying all creditors.

Pls revert is the answer is not satisfactory.



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