Talbot Industries is considering launching a new product. The new manufacturing equipment will cost $13 million, and production and sales will require ar initial $4 million investment in net operating working capital. The company's tax rate is 25%. Enter your answers as a positive values. Enter your answers in
millions. For example, an answer of $10,550,000 should be entered as 10.55. Round your answers to two decimal places.
a. What is the initial investment outlay?
§
8 million
b. The company spent and expensed $150,000 on research related to the new project last year. What is the initial investment outlay?
1 million c. Rather than build a new manufacturing facility, the company plans to install the equipment in a building it owns but is not now using. The building could be
sold for $1.1 million after taxes and real estate commissions. What is the initial investment outlay?