Homecraft Stores (HSI), which operates a chain of retail warehouse-type stores, is considering opening a new store in the Tampa area. The store itself will cost $7,000,000 to build. In addition, fixtures for the store are expected to cost $700,000, and installation of the fixtures is estimated to cost another $50,000. Initial net working capital (primarily due to inventory) is expected to be $600,000. HSI plans to build the Tampa store on land it purchased five years ago for $200,000. The land is presently worth $500,000 and is expected to remain at $500,000 while the store is being built. Calculate the net investment for the proposed Tampa store.
Homecraft Stores (HSI), which operates a chain of retail warehouse-type stores, is considering opening a new store in the Tampa area. The store itself will cost $7,000,000 to build. In addition, fixtures for the store are expected to cost $700,000, and installation of the fixtures is estimated to cost another $50,000. Initial net working capital (primarily due to inventory) is expected to be $600,000. HSI plans to build the Tampa store on land it purchased five years ago for $200,000. The land is presently worth $500,000 and is expected to remain at $500,000 while the store is being built. Calculate the net investment for the proposed Tampa store.
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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Homecraft Stores (HSI), which operates a chain of retail warehouse-type stores, is considering opening a new store in the Tampa area. The store itself will cost $7,000,000 to build. In addition, fixtures for the store are expected to cost $700,000, and installation of the fixtures is estimated to cost another $50,000. Initial net working capital (primarily due to inventory) is expected to be $600,000. HSI plans to build the Tampa store on land it purchased five years ago for $200,000. The land is presently worth $500,000 and is expected to remain at $500,000 while the store is being built. Calculate the net investment for the proposed Tampa store.
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