10 points each CF = -1 + Change in networking capital - upfront (-) S (sale of old asset if replacement) +T(-B) Sale - book if old asset is sold for a loss You get a credit 1 = new project cost + installation + shipping + putting it into service A firm would like to replace 2 machines with one newer more efficient machine. The new machine device costs $100,000 and requires an additional outlay of $15,000 to cover installation and shipping costs. The new device will cause the firm to increase its networking capital by $10,000. Both of the old machines can be sold, the first for $50,000 (book value $15,000) and the second for $30,000 (book value $40,000). The firm's marginal tax bracket is 35%. Find the initial outlay