Question

The project requires an initial investment of 300,000 on equipment and is depreciated over 6 years. The working capital increased by18,000. What is the total initial investment for the project?

1) $300,000
2) $318,000
3) $282,000
4) $318,000

Answer 1

The total initial investment for the project is the sum of the initial investment on equipment, which is $300,000, and the increased working capital, which is $18,000, leading to a total of $318,000.

Step-by-step explanation:

The total initial investment for the project includes the initial investment on equipment and the increase in working capital. The initial investment on equipment is $300,000, and the working capital increased by $18,000. Therefore, to find the total initial investment, we need to add these two amounts together:

$300,000 (initial investment on equipment) + $18,000 (increase in working capital) = $318,000

Thus, the correct answer is 2) $318,000.