Parker & Stone, Inc., is considering establishing a new manufacturing facility in South Park to produce garden tools. The company purchased land 8 years ago for $6 million with the anticipation of using it as a warehouse and distribution site, but the company has since decided to lease this facility to a competitor. If the land were sold today, the company would get $10.2 million. The company wants to build its new manufacturing plant on this land; The plant will cost $12.2 million to build, and the site requires $1,122,000 of grading before it is suitable for construction.



Required:
What is the appropriate amount of cash flow to use as an initial investment in fixed assets when evaluating this project?

Answer rating: 100% (QA)

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