Investment Outlay

Microtech Industries is considering launching a new product. The new manufacturing equipment will cost $$43$ million, and production and sales will require an initial $$7$ million investment in net operating working capital. The company$$s tax rate is $30\%.$

a$.$ For capital budgeting purposes, what is the initial investment outlay?

Initial investment outlay $=\_\_\_\_\_\_\_\_\_$ million

b$.$ The company spent and expensed $$850,000$ on research related to the new product last year. Would this change your answer to part a$?$

No

Yes

c$.$ Rather than building a new manufacturing facility, the company plans to install the equipment in a building it owns but is not now using. The building could be sold for $$5\mathrm{.}0$ million after taxes and real estate commissions. What is the initial investment outlay?

Initial investment outlay $=\_\_\_\_\_\_$ million.