Subjects finance

Net Investment Cac41D

Step-by-step solutions with LaTeX - clean, fast, and student-friendly.

Search Solutions

Net Investment Cac41D


1. **State the problem:** Calculate the net investment (initial outlay) for the acquisition of new equipment. 2. **Given data:** - Equipment basic price = 140000 - Modification cost = 30000 - Increase in net operating working capital = 8000 3. **Formula for net investment:** $$\text{Net Investment} = \text{Equipment Price} + \text{Modification Cost} + \text{Increase in Net Operating Working Capital}$$ 4. **Calculate net investment:** $$140000 + 30000 + 8000 = 178000$$ 5. **Explanation:** The net investment includes the purchase price, modification costs, and the additional working capital required to operate the equipment. This total amount represents the initial cash outflow for the project. **Final answer:** $$\boxed{178000}$$