Parker & Stone, Incorporated, is looking at setting up a new manufacturing plant in South Park to produce garden tools.
Posted: Thu May 05, 2022 8:27 am
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?
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?