Truman Industries is considering an expansion. The necessary equipment would be purchased for $10,000, and...
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Truman Industries is considering an expansion. The necessary equipment would be purchased for $10,000, and the expansion would require an additional $1,000 investment in net operating working capital. The tax rate is 40%. a) What is the initial investment outlay? b) The company spent and expensed $500 on research related to the project last year. Would this change your answer? c) The company plans to use a building that it owns to house the project. The building could be sold for $600 after taxes and real estate commissions. Would this change your answer? a)-$6,600; b)Yes; c)No a)-$9,000; b)No; c)Yes a)-$9,000; b)Yes; c)No a)-$11,000; b)Yes; c)No a)-$11,000; b)No; c)Yes
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