25. Coug's Mart, a local supermarket, is considering an expansion project of adding a small deli shop inside the store. Coug's Mart owns a large corner space adjacent to the store and decides to utilize this corner space to host the deli shop. It acquired the corner space 5 years ago at a cost of $45,000. At the time of the purchase, Coug's Mart spent $12,000 on basic renovations, including pushing down a wall to link the space to the main store. The corner space can be rented out today and total value of renting income is estimated to be $55,000. Additional renovation costs will be $8,000 to make the deli shop functional and attractive. Coug's Mart has some unused kitchen equipment, which will be used for the deli project. This equipment can be sold for $9,500 today. Coug's Mart hired a local financial firm to help evaluate the deli project at a fee of $5,000. The company also spent another $2,000 to conduct surveys to analyze local demand for the deli shop. What is the amount of the total initial cash flow for this expansion project? A. $63,000 B. $72,500 C. $74,500 D. $79,500 E. None of the above
25. Coug's Mart, a local supermarket, is considering an expansion project of adding a small deli shop inside the store. Coug's Mart owns a large corner space adjacent to the store and decides to utilize this corner space to host the deli shop. It acquired the corner space 5 years ago at a cost of $45,000. At the time of the purchase, Coug's Mart spent $12,000 on basic renovations, including pushing down a wall to link the space to the main store. The corner space can be rented out today and total value of renting income is estimated to be $55,000. Additional renovation costs will be $8,000 to make the deli shop functional and attractive. Coug's Mart has some unused kitchen equipment, which will be used for the deli project. This equipment can be sold for $9,500 today. Coug's Mart hired a local financial firm to help evaluate the deli project at a fee of $5,000. The company also spent another $2,000 to conduct surveys to analyze local demand for the deli shop. What is the amount of the total initial cash flow for this expansion project? A. $63,000 B. $72,500 C. $74,500 D. $79,500 E. None of the above
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:25. Coug's Mart, a local supermarket, is considering an expansion project of adding a small deli
shop inside the store. Coug's Mart owns a large corner space adjacent to the store and decides to
utilize this corner space to host the deli shop. It acquired the corner space 5 years ago at a cost of
$45,000. At the time of the purchase, Coug's Mart spent $12,000 on basic renovations, including
pushing down a wall to link the space to the main store. The corner space can be rented out today
and total value of renting income is estimated to be $55,000. Additional renovation costs will be
$8,000 to make the deli shop functional and attractive. Coug's Mart has some unused kitchen
equipment, which will be used for the deli project. This equipment can be sold for $9,500 today.
Coug's Mart hired a local financial firm to help evaluate the deli project at a fee of $5,000. The
company also spent another $2,000 to conduct surveys to analyze local demand for the deli shop.
What is the amount of the total initial cash flow for this expansion project?
A. $63,000
B. $72,500
C. $74,500
D. $79,500
E. None of the above
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