Problem:

Your firm is considering a new product development. An outlay of $90,000 is required for equipment, and an additional net working capital of $5000 is required. The project is expected to have a 4 year life, and the equipment will be depreciated on a straight line basis to a $10,000 book value. Producing the new product will reduce current manufacturing expenses by $15,000 annually and increase earnings (revenue) before depreciation and taxes by $18,000 annually. Stanton's marginal tax rate is 40 percent. Stanton expects the equipment will have a market salvage value of $10,000 at the end of 4 years

Requirement:

Question: What is the Total Cost at Time Zero of accepting this project?

Note: Please provide equation and explain comprehensively and give step by step solution.