RTG Inc. is examining an investment opportunity that will involve buying $130,000 worth of equipment. They will need $10,000 in net working capital up front. Shipping will cost $5,000 and installation will cost $7,000. The firm paid a management consultant $4,000 to analyze this project, which is supposed to increase sales by $20,000 per year. If the firm accepts the project, they will have to spend $3,500 to train the employees to use the new equipment. The corporate tax rate is 21%. What is the initial outlay for the project? O $123,000 O $126,500 O $155,500 O $142,300 O $130,500
RTG Inc. is examining an investment opportunity that will involve buying $130,000 worth of equipment. They will need $10,000 in net working capital up front. Shipping will cost $5,000 and installation will cost $7,000. The firm paid a management consultant $4,000 to analyze this project, which is supposed to increase sales by $20,000 per year. If the firm accepts the project, they will have to spend $3,500 to train the employees to use the new equipment. The corporate tax rate is 21%. What is the initial outlay for the project? O $123,000 O $126,500 O $155,500 O $142,300 O $130,500
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:RTG Inc. is examining an investment opportunity that will involve buying $130,000 worth of equipment. They will
need $10,000 in net working capital up front. Shipping will cost $5,000 and installation will cost $7,000. The firm
paid a management consultant $4,000 to analyze this project, which is supposed to increase sales by $20,000 per
year. If the firm accepts the project, they will have to spend $3,500 to train the employees to use the new
equipment. The corporate tax rate is 21%. What is the initial outlay for the project?
O $123,000
O $126,500
O $155,500
O $142,300
O $130,500
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