Used as the initial cash flow for this project

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1. Kelly's Corner Bakery purchased a lot in Oil City five years ago at a cost of $700,000. Today, that lot has a market value of $790,000. At the time of the purchase, the company spent $50,000 to level the lot and another $3,100 to install storm drains. The company now wants to build a new facility on that site. The building cost is estimated at $1,090,000. What amount should be used as the initial cash flow for this project?

2. Assume the following ratios are constant. Total asset turnover = 2.20 Profit margin = 4.8 % Equity multiplier = 1.67 Payout ratio = 45 % What is the sustainable growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Sustainable growth rate.

Reference no: EM131845150

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