Talbot Industries is considering launching a new product. Thenew manufacturing equipment will cost $16 million, and productionand sales will require an initial $1 million investment in netoperating working capital. The company's tax rate is 35%.
- What is the initial investment outlay? Write out your answercompletely. For example, 2 million should be entered as2,000,000.
$
- The company spent and expensed $150,000 on research related tothe new project last year. Would this change your answer?
-Select-YesNoItem 2
- Rather than build a new manufacturing facility, the companyplans to install the equipment in a building it owns but is not nowusing. The building could be sold for $1.5 million after taxes andreal estate commissions. How would this affect your answer?
The project's cost will -Select-increasedecreasenot changeItem 3.
