The Director of Capital Budgeting of Capital Assets Corp. is considering the acquisition of a new high speed photocopy machine
The photocopy machine is priced at $85,000 and would require $2,000 in transportation costs and $4,000 for installation. The equipment will have a useful life of 5 years. The proposal will require that Capital Assets Corp. send a technician for training at a cost of $5,000. The firm's marginal tax rate is 40 percent. How much is the initial cash outlay of the photocopy machine?
A) $64,000
B) $77,000
C) $81,000
D) $96,000
Answer: D
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