XOM inc. has completed the analysis of new machine and estimated the following cash flows. At the end of year 4, firm will complete the project and liquidate the equipment. The equipment originally cost $5M, and production and sales will require an initial $2 million investment in net operating working capital. Modification of new equipment will cost additional $1 million. At the end of year 4, 75% of the machines original cost is depreciated. The salvage value of the equipment is $3M and tax rate is 40%.

Year	0	1	2	3	4
Cash flows	Initial investment Outlay	Operating Cash flow 1	Operating Cash flow 2	Operating Cash flow 3	Operating Cash flow 4
CFs	CF0	C01	C02	C03	C04
	-$? million	$2 million	$3 million	$3 million	$4 million

a) What is the equipments initial investment outlay (CF₀)?