Question

Harris corporation is evaluting the purchase of a new drilling machine that costs 80,000. the machine requires 10,000 to modify and an increase in net operating working capital of 5,000 at the time of purchase. what is the net investment required at t

Answer 1

Net investment required in year 0= $95,000

Step-by-step explanation:

The net investment required in time 0 is the sum of the purchase cost, modification cost and the working capital. They are all relevant cashflow which can be directly attributed to the project.

Net investment required in year 0 = 80,000 + 10,000 + 5,000=95,000

Net investment required in year 0= $95,000