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Talbot Industries is considering launching a new product. The new manufacturing equipment will cost $16 million,...

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Finance

Talbot Industries is considering launching a new product. Thenew manufacturing equipment will cost $16 million, and productionand sales will require an initial $1 million investment in netoperating working capital. The company's tax rate is 35%.

  1. What is the initial investment outlay? Write out your answercompletely. For example, 2 million should be entered as2,000,000.
    $
  2. The company spent and expensed $150,000 on research related tothe new project last year. Would this change your answer?
    -Select-YesNoItem 2
  3. Rather than build a new manufacturing facility, the companyplans to install the equipment in a building it owns but is not nowusing. The building could be sold for $1.5 million after taxes andreal estate commissions. How would this affect your answer?
    The project's cost will -Select-increasedecreasenot changeItem 3.

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