Tide company wants to change its old machinery with a new one. Tide spent $120,000 on a market study months ago. It purchased the old machinery 20 years ago for $1,800,000. The old machinery is depreciated to $100,000 and has a market value of $300,000 today. The new machinery will cost $2,200,000. Tide must also pay $60,000 for installation and $90,000 for training. With the anticipated growth due to the machinery replacement, Tide has to invest $110,000 in working capital. The marginal tax rate is 34%. What is the initial outlay of this project to replace old machinery?

• $2,348,000
• $2,428,000
• $2,328,000
• $2,228,000

A company s considering a project which requires the initial outlay of $300,000 which includes both an after-tax salvage from the old asset of $12,000 and an additional working capital investment of $8,000. The 12-year project is expected to generate annual incremental cash flows of $54,000 and have an expected terminal value at the end of the project of $20,000. The cost of capital is 15 percent, and the company's marginal tax rate is 40 percent. Calculate the net present value of this project.

• -$3,548.43
• $68,781.83
• -$6,544.56
• -$596,451.57
• $12,713.43