A company is considering replacing an old machine, which has a market value of $85,000 and a tax basis of $115,000. The new machine would cost $300,000 and would require an additional $8,000 in working capital for spare parts. If the company's tax rate is 35%, what would be the initial cash outlay for this replacement project?

Question 10 options:

A)

$223,000

B)

$212,500

C)

$178,500

D)

$196,500

E)

$233,500