9. Nelson Mfg. owns a factory that is currently sitting idle. The factory originally costed the...
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9. Nelson Mfg. owns a factory that is currently sitting idle. The factory originally costed the firm $1,600,000 to build ten years ago. It has a 20-year tax life and depreciates in a straight-line basis. The firm received an offer of $1,200,000 for the factory last week. The firm's management rejected this bid even though they were told that it is a reasonable offer in today's market. The firm is evaluating a potential project that will use the factory. In addition, the project will also need the firm spend $500,000 to purchase and assemble a new production line in the factory. What is the initial cost of this project? A. $2,100,000 B. $1,700,000 C. $1,600,000 D. $1,300,000 E. $1,200,000 9. Nelson Mfg. owns a factory that is currently sitting idle. The factory originally costed the firm $1,600,000 to build ten years ago. It has a 20-year tax life and depreciates in a straight-line basis. The firm received an offer of $1,200,000 for the factory last week. The firm's management rejected this bid even though they were told that it is a reasonable offer in today's market. The firm is evaluating a potential project that will use the factory. In addition, the project will also need the firm spend $500,000 to purchase and assemble a new production line in the factory. What is the initial cost of this project? A. $2,100,000 B. $1,700,000 C. $1,600,000 D. $1,300,000 E. $1,200,000
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