Initial Investment Outlay Assignment | Homework For You
June 9th, 2020
Talbot Industries is considering launching a new product. The new manufacturing equipment will cost $8 million, and production and sales will require an initial $1 million investment in net operating working capital. The company’s tax rate is 35%.

a. What is the initial investment outlay? Write out your answer completely. For example, 2 million should be entered as 2,000,000.
b. The company spent and expensed $150,000 on research related to the new product last year. Would this change your answer?
c. Rather than build a new manufacturing facility, the company plans to install the equipment in a building it owns but is not now using. The building could be sold for $1.5 million after taxes and real estate commissions. How would this affect your answer?
The project’s cost will? -Select- increase decrease not change. Get Finance homework help today