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You have gathered information for a project. It will require equipment that costs $2,000,000. Delivery of the equipment will be an additional $500,000, and installation
- You have gathered information for a project. It will require equipment that costs $2,000,000. Delivery of the equipment will be an additional $500,000, and installation will cost $1,000,000. Inventory will be required in the amount of $750,000. Payables will increase $250,000. The company intends to use the project to replace existing equipment, which is fully depreciated and will sell for $1,000,000. The opportunity cost for the firm is 11%, and its tax rate is 40%. What is the initial outlay for the project?
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