What is the investment cost of the machine


A new machine can be purchased for $1,000,000. It will cost $65,000 to ship and $35,000 to modify the machine. A $30,000 recently completed feasibility study indicated that the firm can employ an existing factory owned by the firm, which would have otherwise been sold for $150,000. The firm will borrow $750,000 to finance the acquisition. Total interest expense for 5 years is expected to approximate $250,000. What is the investment cost of the machine for capital budgeting purposes?

Request for Solution File

Ask an Expert for Answer!!
Accounting Basics: What is the investment cost of the machine
Reference No:- TGS085104

Expected delivery within 24 Hours