Question
A firm is considering $5 million. Over the last year, the firm has conducted research on the best way to improve the firm. This research
A firm is considering $5 million. Over the last year, the firm has conducted research on the best way to improve the firm. This research study cost $.5 mil. The new assembly line will replace the currently used assembly line that has a NSV of $1 mil today. The new assembly line uses updated tech and will require employees to be trained today at an expense (non-depreciable) of .5 million. The project will also require the firm to increase Net Working Capital by .8 million. The tax rate facing the firm is 30% What is the initial cash flow if the firm accepts the project today?
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