$11-1$: Talbot Industries is considering launching a new product. The new manufacturing

equipment will cost $$17$ million, and production and sales will require an initial

$$5$ million investment in net operating working capital. The company$$s tax rate is $25\%.$

a$.$ What is the initial investment outlay?

b$.$ The company spent and expensed $$150,000$ on research related to the new product

last year. What is the initial investment outlay?

c$.$ Rather than build a new manufacturing facility, the company plans to install the

equipment in a building it owns but is not now used. The building could be sold

for $$1\mathrm{.}5$ million after taxes and real estate commissions. What is the initial investment outlay?