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MEPCO Corp. is considering an expansion project. The necessary equipment could be purchased at its base price of $500,000 and it would cost another $40,000
MEPCO Corp. is considering an expansion project. The necessary equipment could be purchased at its base price of $500,000 and it would cost another $40,000 to make it ready for use. The project would also require an initial $150,000 investment in net operating working capital which will be recovered when the project ends. MEPCO Corp. plans to house the project in a facility it owns but is not currently in use. The facility could be sold for $550,000 after taxes. The company spent $100,000 on research related to the project last year. The company's tax rate is 35%. What is the initial investment outlay of this project? *
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