**Transcription for Educational Website**---**Feasibility Study and Initial Cash Flow Analysis**You have just completed a $25,000 feasibility study for a new coffee shop in some retail space you own. You bought the space two years ago for $105,000, and if you sold it today, you would net $114,000 after taxes. Outfitting the space for a coffee shop would require a capital expenditure of $35,000 plus an initial investment of $4,700 in inventory. What is the correct initial cash flow for your analysis of the coffee shop opportunity?---**Identify the relevant incremental cash flows below: (Select all the choices that apply.)**- [ ] A. Feasibility study for the new coffee shop.- [ ] B. Amount you would net after taxes should you sell the space today.- [ ] C. Initial investment in inventory.- [ ] D. Capital expenditure to outfit the space.- [ ] E. Price you paid for the space two years ago.---**Calculate the initial cash flow below: (Select from the drop-down menus and round to the nearest dollar.)**1. $ [______]2. $ [______]3. $ [______]Free Cash Flow = $ [______]

Data given: Feasibility study=$25000 Cost of space bought two years ago=$105000 Amount you would net…

Answered: ou have just completed a $25.000…

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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You have just completed a $15,000 feasibility study for a new coffee shop in some retail space you own. You bought the space two years ago for $96,000, and if you sold it today, you would net $114,000 after taxes. Outfitting the space for a coffee shop would require a capital expenditure of $35,000 plus an initial investment of $5,500 in inventory. What is the correct initial cash flow for your analysis of the coffee shop opportunity?
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