When deciding whether to invest in new manufacturing plant

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Reference no: EM131890390

Which of the following should be treated as incremental cash flows when deciding whether to invest in a new manufacturing plant? The site is already owned by the company but existing buildings would need to be demolished.

a. The market value of the site and existing buildings

b. Demolitions costs and site clearance

c. The cost of a new access road put in last year

d. Lost earnings on other products due to executive time spent on the new facility

e. A proportion of the cost of leasing the presidents jet airplane

f. Future depreciation of the new plant

g. The reduction in the firms tax bill resulting from tax depreciation of the new plant

h. The initial investment in inventories of raw materials

i. Money already spent on the engineering design of the new plant

Reference no: EM131890390

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