Question: ABC Inc., is looking at setting up a new manufacturing plant in Loft Park to produce garden tools. The company bought some land 10 years

ABC Inc., is looking at setting up a new manufacturing plant in Loft Park to produce garden tools. The company bought some land 10 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. If the land were sold today, the company would net $9.8 million. The company wants to build its new manufacturing plant on this land; the plant will cost $14.2 million to build, and the site requires $1,568,000 worth of grading before it is suitable for construction.

Required :

What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project?

A) $19,745,280

B) $26,846,400

C) $24,000,000

D) $25,568,000

E) $22,432,000

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