(Ignore income taxes in this problem.) Baber Corporation is planning an investment with the following characteristics: The initial cost of the equipment is closest to:

Question

(Ignore income taxes in this problem.) Baber Corporation is planning an investment with the following characteristics:  The initial cost of the equipment is closest to:

Quizplus · Accepted Answer

The initial cost of the investment is the sum of the equipment cost, shipping and installation cost, and working capital requirements. Adding up the given values, we get:
$150,000 (equipment cost) + $50,000 (shipping and installation cost) + $16,300 (working capital requirement) = $216,300. Therefore, the closest initial cost option is B) $216,300.

(Ignore Income Taxes in This Problem