Capital budgeting – planning investments, Managerial Accounting

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Project C would involve a current outlay of $50,000 on equipment and $15,000 on working
capital. The investment in working capital would be increased to $21,000 at the end of the first
year. Annual cash profits would be $18,000 per annum for five years, at the end of which the
investment in working capital would be recovered.

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