Question: ABC Corporation is considering replacing an existing machine with a new machine. The new machine can be purchased for $15 million and shipping and

ABC Corporation is considering replacing an existing machine with a new machine.

ABC Corporation is considering replacing an existing machine with a new machine. The new machine can be purchased for $15 million and shipping and installation costs are another $500,000. The new machine will also require an initial $2 million investment in net operating working capital. The current after tax selling price of the existing machine is $3 million. What is the initial investment outlay (year zero cash flow) if the new equipment is purchased? O a. $15.5 million b. $14.5 million c. $17.5 million d. Cannot be determined from the information e. $17 million

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