Considered to calculate the initial outlay and why

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Reference no: EM131185240

Calculate the initial outlay required to fund the following project: The firm is considering the purchase of equipment that has an invoice price of $450,000. The cost of shipping and installation is $50,000. The new equipment will replace existing assets that have a current book value of $100,000 and could be sold for $150,000. Additional new working capital of $15,000 will be required to maintain the new equipment and support higher sales. The firm's marginal tax rate is 40%.

Explain what is and is not considered to calculate the initial outlay and why.

Reference no: EM131185240

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