Find the initial outlay or net initial investment

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Reference no: EM131871468

1. Ajar Inc. is considering buying a new machine that costs $150,000, installation $3,000 and an additional investment in net working capital of $5,000. Find the initial outlay or net initial investment (NINV) using a tax rate of 40%.

$158,000

$150,000

$98,000

$154,800

2. A project will increase revenues by $45,000 but will decrease operating expenses by $15,000 and increase depreciation by $5,000. Assume that the tax rate is 30%. The net cash flows are:

$35,000

$47,000

$22,500

$43,500

Reference no: EM131871468

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