In a Discounted Cash Flow (DCF) Analysis, a Required Incremental

Multiple Choice

In a discounted cash flow (DCF) analysis, a required incremental investment in net working capital:

A) Should be amortized over the useful life of the equipment, to yield an improved estimate of the return on the proposed project.
B) Can be disregarded because the same amount of cash will be recovered at the end of the project's life.
C) Should be treated as a recurring cash outflow over the life of the project.
D) Should be treated as a reduction in the required cash outflow in period 0.
E) Should be treated as an immediate cash outflow that is later recovered when this incremental investment is no longer needed.