You have just completed a $20,000 feasibility study for a new coffee shop in some retail space you own. You bought the space two years ago for $98,000, and if you sold it today, you would net $110,000 after taxes. Outfitting the space for a coffee shop would require a capital expenditure of $33,000 plus an initial investment of $5,000 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.) O A. Price you paid for the space two years ago. LB. Initial investment in inventory. Yc. Amount you would net after taxes should you sell the space today. O D. Feasibility study for the new coffee shop. E. Capital expenditure to outfit the space. Calculate the initial cash flow below: (Select from the drop-down menus and round to the nearest dollar.) 1 Opportunity Cost $ 2 Capital Expenditure (outfit of space) . $ 3 Change in Net Working Capital ........ $ 4 Free Cash Flow $
You have just completed a $20,000 feasibility study for a new coffee shop in some retail space you own. You bought the space two years ago for $98,000, and if you sold it today, you would net $110,000 after taxes. Outfitting the space for a coffee shop would require a capital expenditure of $33,000 plus an initial investment of $5,000 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.) O A. Price you paid for the space two years ago. LB. Initial investment in inventory. Yc. Amount you would net after taxes should you sell the space today. O D. Feasibility study for the new coffee shop. E. Capital expenditure to outfit the space. Calculate the initial cash flow below: (Select from the drop-down menus and round to the nearest dollar.) 1 Opportunity Cost $ 2 Capital Expenditure (outfit of space) . $ 3 Change in Net Working Capital ........ $ 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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match those choices with the cash flow
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