A project to replace an old machine with a new one is under consideration. The new machine costs $12.000 and requires an additional working capital investment of $750. The old machine is expected to have a $750 salvage value. Calculate the Initial Outlay of this replacement project assuming the book value of the old asset is $1500. The firm's marginal tax rate is 50% O None of the listed choices is correct O $11.287.50 O $12.037.50 O $12.112.50 O $11,625.00
A project to replace an old machine with a new one is under consideration. The new machine costs $12.000 and requires an additional working capital investment of $750. The old machine is expected to have a $750 salvage value. Calculate the Initial Outlay of this replacement project assuming the book value of the old asset is $1500. The firm's marginal tax rate is 50% O None of the listed choices is correct O $11.287.50 O $12.037.50 O $12.112.50 O $11,625.00
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 13P
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Question
![A project to replace an old machine with a new one is under consideration. The new machine costs $12.000 and requires
an additional working capital investment of $750. The old machine is expected to have a $750 salvage value. Calculate
the Initial Outlay of this replacement project assuming the book value of the old asset is $1500. The firm's marginal tax
rate is 50%.
O None of the listed choices is correct
O $11.287.50
O $12.037.50
O $12.112.50
O $11,625.00](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F19a24fee-0902-4fe5-b2ad-ae1fa9bbed95%2F67e365ca-c47f-4417-a6a4-6d6b7e617e44%2Ffgt7vf5_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A project to replace an old machine with a new one is under consideration. The new machine costs $12.000 and requires
an additional working capital investment of $750. The old machine is expected to have a $750 salvage value. Calculate
the Initial Outlay of this replacement project assuming the book value of the old asset is $1500. The firm's marginal tax
rate is 50%.
O None of the listed choices is correct
O $11.287.50
O $12.037.50
O $12.112.50
O $11,625.00
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