ABC Already Spent $85,000 on a Feasibility Study for a Machine

ABC already spent $85,000 on a feasibility study for a machine that will produce a new product.The machine will cost $2,575,000.Required modifications will cost $375,000.ABC will need to invest $75,000 for additional inventory.The machine has an IRS approved useful life of 7 years;it is presumed to have no salvage value.It will only be operated for 3 years,after which it will be sold for $600,000.What is the total investment amount required for the machine?

A) $3,025,000
B) $2,950,000
C) $2,575,000
D) $2,350,000

Correct Answer:

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