Scottech is examining an investment opportunity that will involve buying $120,000 worth of equipment. They willneed $10,000 in net working capital up front. Shipping will cost $5,000 and installation will cost $10,000. The firmpaid a management consultant $4,000 to analyze this project, which is supposed to increase sales by $20,000 peryear. If the firm accepts the project, they will have to spend $3,500 to train the employees to use the new equipment.The corporate tax rate is 21%. What is the initial outlay for the project?($150,500)($130,500)($126,500)O ($148,500)O ($123,000)

Equipment cost = 120,000 Net working capital = 10,000 Shipping cost = 5000 Installation cost = 10000…

Answered: Scottech is examining an investment…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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