Which of the costs would be included in the cash flows

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XYZ, Co. has conducted extensive market analysis on a market expansion at the cost of $2 million. If they proceed, they will have to purchase land at $650,000, build a structure costing $4 million, equip the structure at a cost of $161,000, train the staff at a cost of $50,000 and fund working capital of $1 million. New revenues will be about $2.3 million with variable costs at 60% of sales.

Problem 1: Which of these costs would be included in the cash flows of time zero and what should be included in the depreciable basis?

Reference no: EM132618653

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