Question: Required investment. Truman industries is considering expansion. The necessary equipment would be purchased for $9 million, and the expansion would require an additional $3 million investment in net operating working capital. The tax rate is 40%.

a. what is the initial investment outlay?

b. The company spent and expensed $50,000 on research related to the project last year. Would this change your answer? Explain.

c. The company plans to use a building that it owns to house the project. The building could be sold for $1 mill after taxes and real estate commissions. How would that fact affect your answer?