Doce Corp. is considering launching a new product. Doce had bought a piece of land 3 years
Question:
Doce Corp. is considering launching a new product. Doce had bought a piece of land 3 years ago for $1 million thinking to use it for expansion of its warehouse, but instead Doce decided to lease a building nearby for those purposes. Today, the value of the land net of taxes is estimated at $2.4 million. Doce now wants to build a new manufacturing plant for the new project on this land. The plant will cost $11 million to build and the site requires $1.1 million worth of improvements before it is suitable for construction. Launching the project will require, today, $1.9 million investment in net operating working capital. In addition, new equipment in the amount of $3.1 million is needed for the project.The tax rate is 20%.
What is the initial investment outlay (IO) for the NPV evaluation of the project?Since the IO is a cash outlay, enter the answer using the negative sign (-) in front of the first digit of your answer.
Enter your answer in millions. For example, if you obtained -$3,450,000then enter -3.45; for -4,000,000then enter -4.00
Your Answer: