The Fleming Company, a food distributor, is considering replacing a filling line at its Oklahoma City warehouse. The existing line was purchased several years ago for $$3,600,000.$ The line$$s book value is $$445,000,$ and Fleming's management feels it could be sold at this time for $$350,000.$ A new, increased capacity line can be purchased for $$2,575,000$ and will require and increase in NWC of $$55,000.$ Delivery and installation of the new line are expected to cost $$50,000$ and $215,000$ respectively. Assuming Fleming$$s marginal tax rate is $35\%,$ calculate the net investment for the new line.

Question $1$Answer

a$.$

$$2,456,750$

b$.$

$$2,511,750$

c$.$

$$2,490,000$

d$.$

$$2,895,000$