Question: The basic format for determining initial investment is: a. It starts with the installed cost of the new asset from which the after-tax proceeds from

The basic format for determining initial investment is:

a. It starts with the installed cost of the new asset from which the after-tax proceeds from the sale of an old asset are subtracted and the change in net working capital is added. b. It takes into account the terminal cash flow from which the after-tax proceeds from the sale of products are subtracted and the resulting change in book value is added back. c. It takes into account the terminal cash flow from which the after-tax proceeds from the sale of an old asset are subtracted and the change in net working capital is added. d. The initial investment is calculated by subtracting all cash inflows occurring at time zero from all cash outflows occurring at time zero.

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