Business, 28.07.2020 21:01 arielmajesty9107

Talbot Industries is considering launching a new product. The new manufacturing equipment will cost $17 million, and production and sales will require an initial $3 million investment in net operating working capital. The company's tax rate is 35%. What is the initial investment outlay? Write out your answer completely. For example, 2 million should be entered as 2,000,000. $ The company spent and expensed $150,000 on research related to the new project last year. Would this change your answer? -Select- Rather than build a new manufacturing facility, the company plans to install the equipment in a building it owns but is not now using. The building could be sold for $1.5 million after taxes and real estate commissions. How would this affect your answer? The project's cost will -Select- .

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Answer from: OGrant18075

What is the initial investment outlay?

initial investment = $17 million (manufacturing equipment) + $3 (increase in net working capital) = $20,000,000

The company spent and expensed $150,000 on research related to the new project last year. Would this change your answer?

No, this will not change the answer because that was a sunk cost that doesn't affect the project's initial outlay.

Rather than build a new manufacturing facility, the company plans to install the equipment in a building it owns but is not now using. The building could be sold for $1.5 million after taxes and real estate commissions. How would this affect your answer?

If the company decides to do this, it will increase the project's initial outlay by $1,500,000 which is the opportunity cost of selling the building.

Answer from: Quest

cognitive overload: having a lot on your mind impairs decision-making and tends to result in the simplest, but not necessarily best, option being selected.

empathy gaps: overlooking how you might feel in a different situation can result in unnecessary purchases, such as overbuying when shopping for food on an empty stomach.

optimism and overconfidence: wearing rose-tinted glasses and having unrealistic expectations about the future can affect money management and leave you unprepared for a change in circumstance.

instant gratification: seeking instant gratification drives impulsive spending and can undermine long-term planning and savings.

harmful habits: automatic or mindless behaviour can amplify a poor financial decision as it becomes a recurring event.

social norms: we are heavily influenced by the actions of others; while this can be in certain circumstances, it also contributes to the pressure to keep up with the joneses through conspicuous consumption.

Answer from: Quest

the specific actions take by the fed. what the fed was attempting to do by taking these actions. the result of the actions taken by the fed

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Talbot Industries is considering launching a new product. The new manufacturing equipment will cost...

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