1. YTD Industries in considering an expansion. The necessary equipment would be purchased for $12 million and its shipping and handling cost would be $2 million. The machine would require additional working capital of $1 million. YTD falls in 30 percent tax bracket.

a. What is the initial investment outlay?

b. What would be the depreciable value of the machine?

c. YTD spent and expensed $45,000 on the survey related to the project last year. How would this expensed amount affect the initial investment? Explain.

d. YTD can use a building it owns to house the machine. The building could be sold for $1.5 million