A nursery would like to build another commercial greenhouse to expand its operations. It estimates that building another greenhouse will cost $180,000. To operate another greenhouse, the nursery estimates an additional labor and utilities will cost $30,000 per year. The greenhouse is expected to produce an additional $60,000 of revenue at the end of year 1; this revenue is expected to increase by $10,000 each year. Choose a cash flow diagram.
A nursery would like to build another commercial greenhouse to expand its operations. It estimates that building another greenhouse will cost $180,000. To operate another greenhouse, the nursery estimates an additional labor and utilities will cost $30,000 per year. The greenhouse is expected to produce an additional $60,000 of revenue at the end of year 1; this revenue is expected to increase by $10,000 each year. Choose a cash flow diagram.
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
Problem 1PS
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Question
A nursery would like to build another commercial greenhouse to expand its operations. It estimates that building another greenhouse will cost $180,000. To operate another greenhouse, the nursery estimates an additional labor and utilities will cost $30,000 per year. The greenhouse is expected to produce an additional $60,000 of revenue at the end of year 1; this revenue is expected to increase by $10,000 each year. Choose a cash flow diagram.
Transcribed Image Text:A
$180K
$70K
$60K
$50K
$40K
$30K
(+)
(+)
2
3
5
End of Year
1
2
3
4
5 E
(-)
(-)
$60K
$70K
$80K
$90K
$100K
$180K
$180K
$100K
$90K
$80K
$70K
$60K
(+)
(+)
3
4
5
End of Year
1
2
3
4
5 E
(-)
$30K
$40K
(-)
$50K
$60K
$70K
$180K
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