Parker & Stone, Incorporated, is looking at setting up a new manufacturing plant in South Park to produce garden tools.

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Parker & Stone, Incorporated, is looking at setting up a new
manufacturing plant in South Park to produce garden tools. The
company bought some land 10 years ago for $7 million in
anticipation of using it as a warehouse and distribution site, but
the company has since decided to rent these facilities from a
competitor instead. If the land were sold today, the company would
net $10 million. The company wants to build its new manufacturing
plant on this land; the plant will cost $15.2 million to build, and
the site requires $1,100,000 worth of grading before it is suitable
for construction. What is the proper cash flow amount to use as the
initial investment in fixed assets when evaluating this
project?