Answer (D) is correct . The machine costs $160,000 and will require $30,000 to install and test. In addition, the company will have to invest in $35,000 of working capital to
Answer (A) is incorrect because The amount of $190,000 ignores the investment in working capital.
Answer (B) is incorrect because The amount of $195,000 ignores the $30,000 of shipping, installation, and testing costs.
Answer (C) is incorrect because The amount of $204,525 is the present value of $225,000 at 10% for 1 year.
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Gunning Industries’ net cash outflow in a capital budgeting decision is
