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A project has an installed cost of $50,000. The project replaces an existing piece of equipment that has an estimated salvage value of $1000 with
A project has an installed cost of $50,000. The project replaces an existing piece of equipment that has an estimated salvage value of $1000 with a book value of $3000 and required an additional working capital investment of $5000. The firms marginal tax rate is 40 percent, and a return of 14 percent is required on projects of this type. What is the Initial Cash Outlay for this project?
I know the answer is 53,200 but please show HOW to get answer, thanks in advance.
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