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? Calculate the initial cash flow below: (Select from the drop-down menus and round to the nearest dollar.) 1 $ 2 $ 3 $ $ 4 Free Cash Flow
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? Calculate the initial cash flow below: (Select from the drop-down menus and round to the nearest dollar.) 1 $ 2 $ 3 $ $ 4 Free Cash Flow
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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Transcribed Image Text:Capital Expenditure (outfit of space)
Capital Expenditure (price of space)
Change in Net Working Capital
Feasibility Study Cost
Opportunity Cost
Transcribed Image Text: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?
Calculate the initial cash flow below: (Select from the drop-down menus and round to the nearest dollar.)
1
2
3
4 Free Cash Flow
GA
CA
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