Cheesy Poofs, Inc., is looking at setting up a new manufacturing plant in South Park to produce
Question:
Cheesy Poofs, Inc., is looking at setting up a new manufacturing plant in South Park to produce Cheesy Poofs. The company bought some land six years ago for $5 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. The land was appraised last week for $4.2 million. The company wants to build its new manufacturing plant on this land; the plant will cost $7.3 million to build, and the site requires $325,000 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? Why?
Step by Step Answer:
The proper cash flow amount to use as the initial investment in fixed assets when evaluating this pr...View the full answer
Fundamentals Of Corporate Finance
ISBN: 9780072553079
6th Edition
Authors: Stephen A. Ross, Randolph Westerfield, Bradford D. Jordan
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