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A firm will make a cash outlay of $175,000 for a piece of equipment. Assume the firm has no other expenses or revenues other than
A firm will make a cash outlay of $175,000 for a piece of equipment. Assume the firm has no other expenses or revenues other than those associated with this project. The firm is going to purchase an additional $10,000 of inventory for production with the new equipment and set up a cash account with a $1,500 balance. The inventory purchase will result in an account payable of $6,500. The firm's tax rate is 34%. What is the net cash flow at time zero?
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