Question

7A4 polnts Parker & Stone, Inc., is looking at setting up a new manufactuing plant in South Park to produce garden tools. The company boug warehouse and dis competitor instead. If the land were sold today, the company would net $6.2 million. The company wants to build its new manufacturing plant on this land, the plant will cost $13.4 million to build, and the site requires $860,000 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? (Enter your answer in dollars, not millions of dollars, e.g. 1,234,567.) ht some land six years ago for $5.9 million in anticipation of using it as a tribution site, but the company has since decided to rent these facilities from a Cash flow amount Hints References eBook & Resources Hint#1 Check my work

Answer 1

Present resale value of land	$    6,200,000
Construction cost	$ 13,400,000
Grading cost	$        860,000
Cash flow amount	$ 20,460,000