Biology Forums - Study Force

Cutting Edge Concrete (CEC) set the industry standard for high-performance concrete from the company's conception in 2008 until 2012. New environmentally beneficial innovations opened a new marketing arena for concrete manufacturers in 2008, with concrete mixes that reduced pollution caused by traffic.

In Stage I, the project-identification stage, CEC determined that green construction ensured the company remained competitive in industry.

In Stage II, the information-gathering stage, CEC contracted a cost-benefit analysis and cost-effectiveness analysis to measure the effect that adoption of new technology would have on revenue. CEC finds that the after-tax initial investment for the machine is $410,000 and the machines have a useful life of 8 years. Cash inflows are estimated to cost $11,000 and $21,000 from the disposal of old machine is $21,000.
   Cost of new machine   $410,000
   Investment in working capital   11,000
   Cash flow from disposal of existing machine   (21,000)
Required
Compute the net initial investment for the machine.
A) $300,000
B) $400,000
C) $500,000
D) $600,000
E) $700,000

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Was a lot harder than it appeared! Thanks