Kelly's Corner Bakery purchased a lot in Oil City 6 years ago at a cost of $302,000. Today, that lot has a market value of $340,000. At the time of the purchase, the company spent $15,000 to level the lot and another $20,000 to install storm drains. The company now wants to build a new facility on that site. The building cost is estimated at $1.51 million. What amount should be used as the initial cash flow for this project?
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A: Option E. 23,828,000
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Kelly's Corner Bakery purchased a lot in Oil City 6 years ago at a cost of $302,000. Today, that lot has a market value of $340,000. At the time of the purchase, the company spent $15,000 to level the lot and another $20,000 to install storm drains. The company now wants to build a new facility on that site. The building cost is estimated at $1.51 million. What amount should be used as the initial cash flow for this project?
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- Kelly’s Corner Bakery purchased a lot in Oil City 6 years ago at a cost of $302,000. Today, that lot has a book value of zero and market value of $340,000. At the time of the purchase, the company spent $15,000 to level the lot and another $20,000 to install storm drains. The company now wants to build a new facility on that site. The building cost is estimated at $1.51 million, and will be depreciated using the straight-line method to a $400,000 book value over the 6-year life of the project. The company is evaluates this new facility will increase annual sales by $1.2 million and annual cash costs by $0.5 million. Based on past information, the company believes that it can sell the facility for $800,000 when they are done with it in 6 years. The applicable tax rate is 32 percent. What is the net present value of the project if the required rate of return is 10 percent?Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land 5 years ago for $7,385,474 in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent these facilities from a competitor instead. If the land were sold today, the company would net $3,944,875. An engineer was hired to study the land at a cost of $617,920, and her conclusion was that the land can support the new manufacturing facility. The company wants to build its new manufacturing plant on this land; the plant will cost $5,838,309 to build, and the site requires $994,648 worth of grading before it is suitable for construction. What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project?Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land 6 years ago for $5,397,921 in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent these facilities from a competitor instead. If the land were sold today, the company would net $3,370,355. An engineer was hired to study the land at a cost of $559,424, and her conclusion was that the land can support the new manufacturing facility. The company wants to build its new manufacturing plant on this land; the plant will cost $4,394,972 million to build, and the site requires $1,358,566 worth of grading before it is suitable for construction. What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project?
- Company A purchased a corner lot five years ago at a cost of $134000. The lot was recently appraised at $119000. At the time of the purchase, the company spent $2100 to grade the lot and another $24000 to build a small building on the lot to house a parking lot attendant who has overseen the use of the lot for daily commuter parking. The company now wants to build a new retail store on the site. The building cost is estimated at $126000. What amount should be used as the initial cash flow for this building project?Humphry Incorporated currently produces boat sails and is considering expanding its operations to include awnings for homes and travel trailers. The company owns land beside its current manufacturing facility that could be used for the expansion. The company bought this land ten years ago at a cost of $250,000. Today, the land is valued at $405,000. The grading and excavation work necessary to build on the land will cost $20,000. The company currently owns some unused equipment valued at $60,000. This equipment could be used for producing awnings if $7,000 is spent for equipment modifications. Other equipment costing $780,000 will also be required. What is the amount of the initial cash flow for this expansion project? O $485,000 O $1,522.000 O $1,272,000 O $492,000Parker & Stone, Incorporated, is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land six years ago for $7.4 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent facilities elsewhere. If the land were sold today, the company would net $10.2 million. The company now wants to build its new manufacturing plant on this land; the plant will cost $21.4 million to build, and the site requires $890,000 worth of grading before it is suitable for construction. What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project? Note: Do not round intermediate calculations and enter your answer in dollars, not millions, rounded to the nearest whole number, e.g., 1,234,567. Answer is complete but not entirely correct. Cash flow $ 32,490,000 x
- Parker & Stone, Incorporated, is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land six years ago for $7.4 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent facilities elsewhere. If the land were sold today, the company would net $10.2 million. The company now wants to build its new manufacturing plant on this land; the plant will cost $21.4 million to build, and the site requires $890,000 worth of grading before it is suitable for construction. What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project?Parker & Stone, Incorporated, is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land 6 years ago for $5 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent these facilities from a competitor Instead. If the land were sold today, the company would net $9.2 million. The company wants to build its new manufacturing plant on this land; the plant will cost $14.2 million to build, and the site requires $828,000 worth of grading before it is suitable for construction. What is the proper cash flow amount to use as the initial Investment in fixed assets when evaluating this project? Multiple Choice O $22,572,000 O $24,228,000 O $23,400,000 O $25,439,400 O $19,058,880A civil engineer who owns his own design/build/operate company purchased a small crane 3 years ago at a cost of $65,000. At that time, it was expected to be used for 10 years and then traded in for its salvage value of $10,000. Due to increased construction activities, the company would prefer to trade for a new, larger crane now, which will cost $80,000. The company estimates that the old crane can be used, if necessary, for another 3 years, at which time it would have a $17,000 estimated market value. Its current market value is estimated to be $29,000, and if it is used for another 3 years, it will have M&O costs (exclusive of operator costs) of $17,000 per year. Determine the values of P, n, S, and AOC that should be used for the existing crane in a replacement analysis. The value of P is $ . The value of n is years. The value of S is $ . The AOC value is $ per year.
- Pomeral & Sons currently produces patio umbrellas and is considering expanding its operations to include tents for automobiles and travel trailers. The company owns land beside its current manufacturing facility that could be used for the expansion. The company bought this land 5 years ago at a cost of $310,981. At the time of purchase, the company paid $33,000 to level out the land so it would be suitable for future use. Today, the land is valued at $295,000. The company has some unused equipment that it owns currently valued at $39,765. This equipment could be used for producing tents if $12,000 is spent for equipment modifications. Other equipment costing $487,162 will also be required. What is the amount of the initial cash flow for this expansion project? (express your answer as a positive number)Riley Co. purchased a parcel of land six years ago for $768,500. At that time, the firm invested $120,000 in grading the site so that it would be usable. Since the firm wasn't ready to use the site itself at that time, it decided to lease the land for $41,500 a year. The company is now considering building a warehouse on the site as the rental lease is expiring. The current value of the land is $652,000. What value should be included in the initial cost of the warehouse project for the use of this land? O $858,500 O $642,000 O $888,500 O $0 O $652.000Sailcloth & More currently produces boat sails and is considering expanding its operations to include awnings for homes and travel trailers. The company owns land beside its current manufacturing facility that could be used for the expansion. The company bought this land 5 years ago at a cost of $495,000. At the time of purchase, the company paid $64,000 to level out the land so it would be suitable for future use. Today, the land is valued at $545,000. The company currently has some unused equipment on its books at a depreciated value of $66,000 – this equipment could be sold for $48,000. Alternatively, this equipment could be used for producing awnings if $28,000 is spent for modifications. Other new equipment costing $610,000 will also be required for the expansion. What is the amount of the initial cash flow for this expansion project?