Question
Your company, Dominant Retailer, Inc., is considering a project whose data are shown below.Revenue and cash operating expenses are expected to be constant over the
Your company, Dominant Retailer, Inc., is considering a project whose data are shown below.Revenue and cash operating expenses are expected to be constant over the project's 5 year expected operating life; annual sales revenue is $95,000.00 and cash operating expenses are $37,500.00.The new equipment's cost and depreciable basis is $135,000.00 and it will be depreciated by MACRS as 5 year property.The new equipment replaces older equipment that is fully depreciated but can be sold for $7,500.In addition, the new equipment requires an additional $5,000 of net operating working capital, which can be fully recovered at the end of the project.The new equipment is expected to be sold for $10,995 at the end of the project in year 5.The marginal tax rate is 28.00%.What is the project's Initial Cash Outlay at Year 0?Note:Enter your answer rounded off to two decimal points.Do not enter $ or comma in the answer box.For example, if your answer is $12,300.456 then enter as 12300.46 in the answer box.
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