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ABC, Inc is considering the purchase of a new equipment. The equipment costs $16507 and an...

ABC, Inc is considering the purchase of a new equipment. The equipment costs $16507 and an additional $4086 is needed to install it. The project will also require an initial $4493 investment in net working capital. The equipment will be depreciated straight-line to zero over a five-year life. What is the project's initial investment outlay?

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Answer #1

What is the project's initial investment outlay?

equipment costs+addition to equipment + investment in net working capital

=$16507+$4086+$4493=$25086

as the cashflow is outflow its indicated by a negative sign =-$25086

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