Talbot Industries is considering launching a new product. The new manufacturing equipment will cost $16 million, and production and sales will require an initial $3 million investment in net operating working capital. The company's tax rate is 30%. 1. What is the initial investment outlay? Write out your answer completely. For example, 2 million should be entered as 2,000,000.
$
2. The company spent and expensed $150,000 on research related to the new product last year. Would this change your answer?
A. Yes
B. No
3. 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:

1.Initial investment outlay= $19 million

2. N0

3.Initial investment outlay= $ 20.5 million

The project's cost will INCREASE

Explanation:

1. Calculation for the initial investment outlay

Using this is formula

Initial investment outlay = New equipment cost + Working capital

Let plug in the formula

Initial investment outlay= $16 million + $3 million

Initial investment outlay= $19 million

Therefore the Initial investment outlay will be $19 million

2. If the company spent and as well expensed the amount of $150,000 on research related to the new product last year, this means that the amount of $150,000 which is a research cost will be a sunk cost because it occured last year which simply means that the initial investment outlay will still remains the amount of $ 19 million.

Therefore there would NOT be any change in the initial investment outlay because it will still remains at the amount of $ 19 million.

3. If the building could be sold for the amount of $1.5 million after taxes and real estate commissions and the company wishes NOT to sell the building this will lead to a loss for the company which is why the company will have to add the amount of $1.5 million into the already initial investment outlay of $19 million while evaluating their project.

Hence,

Initial investment outlay = $19 million +$ 1.5 million

Initial investment outlay= $ 20.5 million

Therefore The project's cost will INCREASE by the market value of the building

answer; o anticipate where news will happen;

two years ago, when picking flowers in the mountains back of yosemite valley, i found a book. it was blotted and storm-beaten; all of its outer pages were mealy and crumbly. the paper seemed to dissolve like the snow beneath which it had been buried, however; many of the inner pages were well preserved. and although all were more or less stained and torn, whole chapters were easily readable. this is the condition of the great open book of yosemite glaciers today; its granite pages have been torn and blurred by the same storms that wasted the castaway book.

two years ago, when picking flowers in the mountains back of yosemite valley; i found a book. it was blotted and storm-beaten, all of its outer pages were mealy and crumbly. the paper seemed to dissolve like the snow beneath which it had been buried, however, many of the inner pages were well preserved. and although all were more or less stained and torn; whole chapters were easily readable. this is the condition of the great open book of yosemite glaciers today, its granite pages have been torn and blurred by the same storms that wasted the castaway book.