Calculate the initial outlay required to fund this project

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Reference no: EM131074670

J.B. Corporation is considering the purchase of equipment that has an invoice price of $450,000. The equipment was recommended by a consulting firm that did an analysis for J. B. Corporation. J. B. paid the consulting firm $12,000 for its report. The cost of shipping and installation is $50, 000. The equipment will be depre4iated on a straight-line basis over its useful life of 10 years, assuming no salvage vale. The equipment will replace existing assets that have a current book value of $100,000 and which could be sold for $150,000. Additional net working capital of $15,000 will be required to maintain the equipment and to support higher sales. J.B.’s marginal tax rate is 40%. Calculate the initial outlay required to fund this project.

Reference no: EM131074670

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