What is proper cash flow amount to use as initial investment

Assignment Help Financial Accounting
Reference no: EM132790923

Problem 1: ABC Inc is looking to set up a new manufacturing plant to manufacture widgets. The plant will be built on a piece of vacant land the company bought for $1 million, 8 years ago. The company has not used the land in the past 8 years. Today the land is worth $3 million. The company will build its manufacturing plant on the vacant land. The plant will cost $10.5 million to build. The site, the vacant land, requires $1.5 million of grading before it is suitable for construction. What is the proper cash flow amount to use as the initial investment when evaluating this project?

A) $15.0 million
B) $10.5 million
C) $11.5 million
D) $13.0 million
E) $13.5 million

Reference no: EM132790923

Questions Cloud

What should be the loss recognized from the sale : On March 1, 2029, the machine was sold for P18,000. What should be the loss recognized from the sale of the machine
Explain what is mercantilism in detail : What is mercantilism? How is it similar to modern capitalism? What are joint-stock companies? In what ways are they precursors to modern corporations?
Companies embarking on international expansion : What are some of the common motivators for companies embarking on international expansion? Why is international market due diligence important?
Estimate of the project rate of return : What happens if the IRR exceeds the cost of the funds used to finance the project? What happens if the IRR is less than the cost of capital?
What is proper cash flow amount to use as initial investment : ABC Inc is looking to set up a new manufacturing plant, What is the proper cash flow amount to use as the initial investment when evaluating this project?
How do you know whats going on in the world : Do you watch news shows? Subscribe to news apps? Does your mom just tell you the news highlights of the week? Tell us how you know what''s happening
Determine the coupon payment : Given Number of Periods to Maturity is 8, Face Value is $1,000, YTM is 4.5%, and the Bond Price is $880.00, determine the Coupon Payment.
How western european empires operated : In chapter 7, Burbank and Cooper argue that "Both [the Russian and Chinese] imperial systems developed flexible ideologies that differed fundamentally.
Compute cogs and and income statement : How do prepare a cogm, compute cogs and and income statement. raw materials inventory, begining 30.Finished goods inventory beginning 150

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd