Superstrut Is Considering Replacing an Old Press That Cost $80,000

question 19

Multiple Choice

Superstrut is considering replacing an old press that cost $80,000 six years ago with a new one that would cost $245,000.The old press has a net book value of $15,000 and could be sold for $5,000.The increased production of the new press would require an investment in additional working capital of $6,000.The company's tax rate is 40%.Superstrut's net investment now in the project would be:

• A)$256,000
• B)$242,000
• C)$250,000
• D)$245,000