What is initial outlay, A company in looking to invest in

What is initial outlay

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Reference no: EM131981157

A company in looking to invest in new machinery. The cost of the machinery, including shipping and installation costs, is $40 million. The company has a buyer for the old machinery who is willing to pay $3 million. Currently the book value of the old machinery is $4 million. The company will also invest working capital in additional inventory in order to sustain the higher levels of efficiency that come with the new machinery. The total investment in net working capital will be $3.5 million. If the company’s marginal tax rate is 39%, what is the initial outlay?

Reference no: EM131981157

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