Question: Tomatoes Inc. is planning a project that involves machinery purchases of $100,000. The new equipment will be depreciated over five years straight line. It will

Tomatoes Inc. is planning a project that involves machinery purchases of $100,000. The new equipment will be depreciated over five years straight line. It will replace old machinery that will be sold for an estimated $36,000 and has a book value of $22,000. The project will also require hiring and training 10 new people at a cost of about $12,000 each. All of this must happen before the project is actually started. The firm’s marginal tax rate is 40%. Calculate C0, the project’s initial cash outlay.

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