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| Mobile Home Manufacturing, Inc., is evaluating a proposed acquisition of a new machine at a purchase price of $380,000 and installation charges that will amount to $20, A $15,000 increase in working capital will be required. The machine will have a useful life of 4 years, after which it can be sold for $50, The estimated annual incremental operating revenues and cash operating expenses are $750,000 and $500,000, respectively, for each of the 4 years. Mobile Home’s tax rate is 40%, and the cost of capital is 12%. Mobile Home uses straight-line depreciation for both financial reporting and income tax purposes. If Mobile Home accepts the project, the initial investment will be A. $345,000 B. $365,000 C. $385,000 D. $415,000 |