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Investment in net working capital is included in the cash flows:

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Wize University Introduction to Finance Textbook > Cash Flow Estimation

Net Present Value

5 Activities

Investment in net working capital is included in the cash flows:
More Net Present Value Questions:
Replace the old machine with a new machine if:
Use the following two statements to answer this question:
I. Expansion projects are projects that would add something extra to the firm in terms of sales or cost savings. The incremental cash flows arising from such investment decisions are the new cash flows.
II. Replacement projects are projects that involve the replacement of an existing asset with a new one. The incremental cash flows arising from such investment decisions are the new operating expenses.