Metro Corporation will spend $1 million for special manufacturing equipment. Shipping and installation charges will amount to $175, 000 and an initial increase in net working capital of $50, 000 will be required. The equipment will replace an existing machine that has a salvage value of $85, 000 and a book value of $140, 000. If Metro has a current marginal tax rate of 34% what is the amount of the initial outlay for this project? -$1, 121, 300 -$1, 328, 700 -$1, 158, 700 -$1, 225, 000 -$1, 021, 300 Shell Biotech Corporation is considering two mutually exclusive capital investment projects. Project 1 costs $75, 000, and would produce differential cash flows of $16, 200 for each of the next 9 years. Project 2 also costs $75, 000, but would produce differential cash flows of $14, 000 for each of the next 12 years. If Shell's cost of capital is 11%, which alternative should be chosen? Project 1 should be accepted. Project 2 should be accepted. Both projects should be accepted. Neither is acceptable. Projects 1 and 2 can not be compared. Jefferson Corporation is purchasing equipment with a 10-year life which will increase revenue by $38, 000 per year and increase expenses by $21, 000 per year. The cost of the project is $24, 000, and the equipment has a salvage value of $9, 000 at the end of the tenth year. The project will require a $6, 000 investment in net working capital immediately. The equipment will be depreciated for 10 years using simplified straight line. Jefferson's marginal tax rate is 35%. Calculate the total year 10 net cash flow, including both the last annual cash flow and the project's terminal cash flow. $23, 740 $21, 340 $20, 890 $17, 740 $11, 890