Parker & Stone, Inc. , is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land 6 years ago for $6 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 todaythe company would net $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 $1122,000 worth of grading before it is suitable for construction .

P10-1 Relevant Cash Flows (L01) Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land 6 years ago for $6 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 $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 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? O $22,400,000 $18,381,120 O $21,278,000 O $24,698,100 O $23,522,000