Jefferson Corporation is considering an expansion project. The necessary equipment could be purchased for $15 million and shipping and installation costs are another $500,000. The project will also require an initial $2 million investment in net working capital. The company's tax rate is 40%. What is the project's initial investment outlay (in millions)?
A) $15.0
B) $15.5
C) $17.0
D) $17.5

Question

Quizplus · Accepted Answer

The initial investment outlay includes the cost of equipment ($15 million), shipping and installation costs ($0.5 million), and the investment in net working capital ($2 million), totaling $17.5 million.

Jefferson Corporation Is Considering an Expansion Project