Cash outflow associated with the acquisition

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Reference no: EM13953677

Given the following information, what is the required cash outflow associated with the acquisition of a new machine; that is, in a project analysis, what is the cash outflow at t = 0?

Purchase price of new machine $8,000

Installation charge 2,000

Market value of old machine 2,000

Book value of old machine 1,000

Inventory decrease if new machine is installed 1,000

Accounts payable increase if new machine is installed 500

Tax rate 35%

Cost of capital 15%

Reference no: EM13953677

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