What is the initial outlay of the given project

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Reference no: EM132065929

Question: The Immokalee Vegetable Company is considering replacing some vegetable packing equipment. The cost of the new packing machine is $265,000 and it would require shipping and set up costs of $15,000. The new machine will cause inventories and the rest of net operating working capital to increase by $12,000 for the length of the project. It will also cost the company $7,000 in training time to enable the employees to learn how to manage the new equipment. The old packing machine's installed cost was $150,000 and 94% of its value has been depreciated so far for financial statement purposes meaning 6% remains. The company believes the old machine could be sold for $55,000 at an equipment auction which is close to the price that similar equipment has been sold for. If the company's marginal tax rate is 34%, what is the initial outlay of this project?

Reference no: EM132065929

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