1. Ajar Inc. is considering buying a new machine that costs $150,000, installation $3,000 and an additional investment in net working capital of $5,000. Find the initial outlay or net initial investment (NINV) using a tax rate of 40%.
$158,000
$150,000
$98,000
$154,800
2. A project will increase revenues by $45,000 but will decrease operating expenses by $15,000 and increase depreciation by $5,000. Assume that the tax rate is 30%. The net cash flows are:
$35,000
$47,000
$22,500
$43,500