Question
A proposed new investment has annual projected sales of 810,000 and annual total costs of 750,000 during its economic life of 6 years. This investment
A proposed new investment has annual projected sales of 810,000 and annual total costs of 750,000 during its economic life of 6 years. This investment will be depreciated over 6 years (straight line) with annual depreciation of 20,000 leaving an expected residual value of 30,000 at the end of its economic life. This new investment requires increase in net working capital in year 0 with the amounts of 6,500. What amount should be included in the project analysis for total initial outlay (please consider this as a negative value) of the project?
A. - 126,500
B. - 143,500
C. - 96,500
D. - 156,500
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