A project at GRT Company will require purchasing new equipment for $250,000. Freight, installation, and customization will
Question:
A project at GRT Company will require purchasing new equipment for $250,000. Freight, installation, and customization will add $192,000 to the total cost. The equipment will be installed in an unused building. The building cost $228,000 when the company bought it eight years ago. GRT tried to sell the building but was unable to find a buyer. The equipment will be depreciated on a straight-line basis over its 12-year life to a value of $0. The equipment is expected to be sold at the end of the project for $60,000. The project is expected to increase accounts receivable by $95,000, inventory by $18,000, and accounts payable by $40,000. What is the Year 0 cash outflow?
$400,000
$515,000
$442,000
$743,000
$393,000
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw