Cash flow amount to use as initial investment in fixed asset

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Reference no: EM131983797

Ned is considering opening a new store that specializes in left-handed gadgets. Ned bought some land 5 years ago for $6 million. If the land were sold today, Ned would net $9.2 million. Ned wants to build the new store on this land; the building will cost $13.2 million to build, and the site requires $1,012,000 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?

Reference no: EM131983797

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