What is the proper cash flow amount

Assignment Help Accounting Basics
Reference no: EM133018544

Question - White Oak Garden Inc. is looking at setting up a new manufacturing plant in London, Ontario, to produce garden tools. The company bought some land six years ago for $3.5 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 $3.9 million. The company wants to build its new manufacturing plant on this land: the plant will cost $16.72 million to build, and the site requires $850,000 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? Why?

Reference no: EM133018544

Questions Cloud

Painting and decorating course : Provide 3 examples of what surface preparation should comply with. Painting and decorating course
How many customers do you guys have per day : Please help me write the following open question (bold) in a narrative using the example below
What are the 3 components of bank deregulation : What are the 3 components of bank deregulation? Give examples of each.
What is the OCF for each year of this project : The project is estimated to generate $2,650,000 in annual sales, with costs of $840,000. If the tax rate is 35%, what is the OCF for each year of this project
What is the proper cash flow amount : The plant will cost $16.72 million to build, and site requires $850,000 worth of grading before it is suitable for construction. What is proper cash flow
What are the three branches of government : What are the three branches of government? Why is it necessary to separate the government in this way?
Determine the present book value of a laptop bought : Determine the present book value of a laptop bought in 2019 for 35,000 if the depreciation cost is php2,000.00. Show your computation
How the environment may play a role in student behavior : Explain how the environment may play a role in student behavior? Why are certain environments more suitable for some students and not others? Explain how change
Potential for data leakage : Consider the potential for data leakage. You do not want to include variables in your model which may not be available when applying the model; that is, some da

Reviews

Write a Review

Accounting Basics Questions & Answers

  Prepare a brief memorandum to the owner concerns

You are the financial officer for Music Plus, a retailer that sells goods for home entertainment needs. The business owner, Jamie Madsen.

  How journalize entry to apply factory overhead to production

The chief cost accountant for Voltaire Beverage Co. estimated that total factory overhead. Journalize the entry to apply factory overhead to production for May.

  Calculate xyz companys sales commissions for 2018

Calculate XYZ Companys sales commissions for 2018, Assume that the actual overhead cost during 2018 was equal to the applied overhead

  Evaluate the issue of integrity from the perspective

Evaluate the issue of integrity from the perspective of possibly taking on Jost Furniture as a new client

  What are some of ethical challenges business leaders face

What are some of the ethical challenges business leaders face? What is the role of business ethics in improving corporate strategy and community

  Why should accountants be concerned about risks

Why should accountants be concerned about risks inherent in a complex software system such as the operating system?

  Prepare the journal entry to record the change in accounting

Assume that Weihrich used FIFO before 2011, and then in 2011 decided to switch to average cost. Prepare the journal entry to record the change in accounting principle and briefly describe any other steps Weihrich should take to appropriately report t..

  How much is allocated to the preference shares

An equipment with acquisition cost of P900, 000, book value of P450, 000 and fair value of P500, 000. How much is allocated to the preference shares

  Determine the current average cost per meal

With a capacity of 800 meals per day, the restaurant serves an average of 750 meals each day. Determine the current average cost per meal

  Identify the appropriate opinion type from options provided

For each of these situations listed below, identify the appropriate opinion type from the options provided. Is the scenario presented a GAAP issue or GAAS issue

  Journalize the entry to record payment of the January wages

Assume that the first paid period of the following year ends on January 6 and that wages of $61,375 were paid. Journalize the entry to record the payment

  What is the total number of equivalent units for materials

Company A had the following department data: Materials are added at the beginning of the process. What is the total number of equivalent units for materials

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