Given the following information, what is the required cash outflow associated with the acquisition of a new machine; that is, in a project analysis, what is the cash outflow at t = 0?
Purchase price of new machine $8,000
Installation charge 2,000
Market value of old machine 2,000
Book value of old machine 1,000
Inventory decrease if new machine is installed 1,000
Accounts payable increase if new machine is installed 500
Tax rate 35%
Cost of capital 15%