Question
Scottech is examining an investment opportunity that will involve buying $200,000 worth of equipment. They will need $20,000 in net working capital up front. Shipping
Scottech is examining an investment opportunity that will involve buying $200,000 worth of equipment. They will need $20,000 in net working capital up front. Shipping will cost $10,000 and installation will cost $15,000. The firm paid a management consultant $8,000 to analyze this project, which is supposed to increase sales by $40,000 per year. If the firm accepts the project, they will have to spend $7,000 to train the employees to use the new equipment. The corporate tax rate is 21%. What is the initial outlay for the project?
a) $245,000
b) $260,000
c) $300,000
d) $283,600
e) $252,000
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