Proposed investment in new inventory management system

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Skye is evaluating a proposed investment in a new inventory management system. The system costs $350,000 and will be depreciated using the straight-line method over a five-year expected useful life to a $70,000 salvage value. The new system will allow the firm to immediately reduce its inventory levels by about $40,000 and will save approximately $20,000 per year in annual labor costs. What is this project's initial outlay?

Reference no: EM13947728

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