Question

Marston Manufacturing Company is considering a project that requires an investment in new equipment of $4,200,000, with an additional $210,000 in shipping and installation costs. Marston estimates that its accounts receivable and inventories need to increase by $840,000 to support the new project, some of which is financed by a $336,000 increase in spontaneous liabilities (accounts payable and accruals).The total cost of Martson's new equipment is ___________.

Answer 1

$4,410,000

Step-by-step explanation:

The computation of the total cost of Martson's new equipment is shown below:

= Required investment in new equipment + additional shipping and installation costs

= $4,200,000 + $210,000

= $4,410,000

We simply added the required investment value in new equipment and additional shipping and installation cost so that the correct value can come.

All other information which is given is not relevant. Hence, ignored it