What is the project initial cash flow

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A capital project requires a $50,000 increase in working capital. It also requires equipment at a price of $200,000. It takes $20,000 to install the equipment and $15,000 to ship the equipment to the desired location. The income tax rate is 35% and equipment is depreciated for income tax purposes on a straight line basis.

Problem 1: What is the project's initial cash flow?

Option 1: 250,000

Option 2: 200,000

Option 3: 120,000

Option 4: 285,000

Option 5: 235,000

Reference no: EM132930005

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