Question
You have been researching the possiblity of starting a new business and have purchased (for $50,000) some equipment to manufacture prototype products to show to
You have been researching the possiblity of starting a new business and have purchased (for $50,000) some equipment to manufacture prototype products to show to prospective customers. The equipment, however, is not suitable for the launch of the project and would have to be replaced with larger, more sophisticated equipment (for $500,000). The equipment has no use for your company if you do not pursue the new business. The equipment could be sold for its scrap value of $22,000. What amount should be included in the Discounted Cash Flow analysis of the new business due to this equipment?
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