The Director of Capital Budgeting of Capital Assets Corp. is considering the acq

Question

The Director of Capital Budgeting of Capital Assets Corp. is considering the acquisition of a new high speed photocopy machine. The photocopy machine is priced at $85,000 and would require $2,000 in transportation costs and $4,000 for installation. The equipment will have a useful life of 5 years. The proposal will require that Capital Assets Corp. send technician for training at a cost of $5,000. The firm's marginal tax rate is 40 percent. How much is the initial cash outlay of the photocopy machine?
A) $58,600
B) $64,000
C) $77,000
D) $81,000
E) $96,000

Explanation / Answer

85,000+2,000+4,000+5,000= 96,000 E)

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