74. a new machine can be purchased for $1,000,000. it will cost

| June 9, 2016

Question
74. 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?

a. $2,030,000

b. $1,530,000

c. $1,100,000

d. $1,250.000

e. $1,280, 000

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