What is the proper cash-flow amount

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Ellay corp. is considering a new expansion project that consists of setting up a new manufacturing plant. The company bought a land 3 years ago for $2.1 million but did not use it. The company wants to build its new manufacturing plant on this land; the plant will cost $2.9 million to build. If the land was sold today, the company would net $2.2 million. The company would also invest in its Net working capital for an amount of $250,000.

What is the proper cash-flow amount to use as the initial investment in fixed assets when evaluating this project?

Reference no: EM132501065

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