A New Machine Can Be Purchased for $1,800,000

question 83

Multiple Choice

A new machine can be purchased for $1,800,000.It will cost $35,000 to ship and $15,000 to fine-tune the machine.The new machine will replace an older version that is fully depreciated and will be sold for $200,000.The firm's income tax rate is 35%.What is the initial outlay for capital budgeting purposes?

• A) $1,580,000
• B) $1,630,000
• C) $1,650,000
• D) $1,720,000

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Definitions:

Molds

Fungi that grow in the form of multicellular filaments, known as hyphae, which are often found in damp, warm conditions.

Spores

A resistant form of certain species of bacteria.

Keratins

are a family of fibrous structural proteins that are key components of hair, nails, and the outer layer of skin, as well as other epithelial tissues.

Agar

A gelatin-like substance derived from seaweed that gives a culture medium its semisolid consistency.