Workman Company Is Considering a Five-Year Project That Requires a Typical

Multiple Choice

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) II only.
C) III only.
D) I and II.
E) I and III.