Firm X is considering a new project. The cost of the machine is $155,000. The cost of shipping and installation is an ad

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Firm X Is Considering A New Project The Cost Of The Machine Is 155 000 The Cost Of Shipping And Installation Is An Ad 1 (24.17 KiB) Viewed 28 times

Firm X is considering a new project. The cost of the machine is $155,000. The cost of shipping and installation is an additional $10,000. Sales are expected to be $375,000 per year. The operating costs will be 60% of sales. The project will require an increase in net working capital of $35,000 and the beginning of the project. The project will last four year at which time the firm will sell the machine for $25,000. The firm's tax rate is 20% and cost of capital is 8%. Assume the machine is fully depreciated at the end of the fourth year. What is the cost of the initial outlay? Multiple Choice $165,000 $190,000 $155,000 $200,000