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What is the amount of the initial cash flow

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Question - PQR Ltd currently produces boat sails and is considering expanding its operations to include awnings. The expansion would require the use of land the firm purchased three years ago at a cost of $145,000 that is currently valued at $155,500. The expansion could use some equipment that is currently sitting idle if $7,500 of modifications were made to it. The equipment originally cost $139,500 six years ago, has a current book value of $24,700, and a current market value of $39,000. Other investment in machinery is $780,000. What is the amount of the initial cash flow for this expansion project?

a. $819000

b. $935500

c. $780000

d. $982000

Reference no: EM133006946

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