Use as initial investment in fixed assets when evaluating

Assignment Help Financial Management

Reference no: EM131055096

Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land six years ago for $5.5 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 $5.8 million. The company wants to build its new manufacturing plant on this land; the plant will cost $13 million to build, and the site requires $820,000 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: EM131055096

Questions Cloud

What are the key variables you will need to study : What are the key variables you will need to study? Who is the stakeholder and what decision will they make based on the analysis results? What are the multiple ways you might solve this problem?

What impact does transaction have on firm current ratio : Suppose a firm pays a 50,000$ trade credit obligation to a supplier in cash. a. What impact does this transaction have on the firm's current ratio if the initial current ratio equaled 1? b. What impact does this transaction have on the firm's current..

Diverse rural areas into crowded-congested citites : Reasons why people continue to migrate from diverse rural areas into the crowded and congested cities in spite of high and rising levels of urban unemployment?

What are the characteristics of a population : When would the characteristics of a population make them inappropriate to use?

Use as initial investment in fixed assets when evaluating : Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land six years ago for $5.5 million in anticipation of using it as a warehouse and distribution site, but the comp..

Summarizing a current article on the economy : Find an article that discusses the current state of the U.S. economy. Take this article and write a three-paragraph summary of the article. In your summary, include any references to GDP or U.S. economic policy.

What is the mean price of the items sold by john : Compute the z-scores for each of the five data values. Which of the following is the correct set of z-values?

Prepare journal entries about uber ceo sees profits in china : Prepare the Journal entries about "Uber CEO sees profits in China in 2 years' time" or "Icahn: Republicans don't understand economics and it's killing the country"

What is the aggregate demand : What is the Aggregate Demand (AD)? What is the short-run aggregate supply (SRAS)? Describe the reasons for their slope.

User Account

All Pages