Question

Talbot Industries is considering launching a new product. The new manufacturing equipment will cost $19 million, and production and sales will require an initial $5 million investment in net operating working capital. The company's tax rate is 25%. Enter your answers as a positive values. Enter your answers in millions. For example, an answer of $10,550,000 should be entered as 10.55. Round your answers to two decimal places. What is the initial investment outlay

Answer 1

$24 million

Step-by-step explanation:

Initial investment outlay includes the cost of the new manufacturing equipment and the net operating working capital.

Initial investment outlay = cost of the new manufacturing equipment + net operating working capital.

$19 million + $5 million = $24 million