A new machine can be purchased for $1,200,000. It will cost $35,000 to ship and

Question

A new machine can be purchased for $1,200,000. It will cost $35,000 to ship and $15,000 to modify the machine. A $12,000 recently completed feasibility study indicated that the firm can employ an existing factory owned by the firm, which would have otherwise been sold for $180,000. The firm will borrow $750,000 to finance the acquisition. Total interest expense for 5-years is expected to approximate $350,000. What is the investment cost of the machine for capital budgeting purposes? (Points : 1) $2,180,000 $1,780,000 $1,442,000 $1,430,000

Explanation / Answer

What is the investment cost of the machine for capital budgeting purposes= 1,200,000+35000+12000+350000+180000 =$1780000 ans:b

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