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 $100,000, and if you sold it today, you would net $115,000 after taxes. Outfitting the space for a coffee shop would require a capital expenditure of $30,000 plus an initial investment of $5,000 in inventory. What is the correct initial cash flow for your analysis of the coffee shop opportunity?
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 $100,000, and if you sold it today, you would net $115,000 after taxes. Outfitting the space for a coffee shop would require a capital expenditure of $30,000 plus an initial investment of $5,000 in inventory. What is the correct initial cash flow for your analysis of the coffee shop opportunity?
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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![19. 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 $100,000, and if you sold it today, you would net
$115,000 after taxes. Outfitting the space for a coffee shop would require a capital expenditure of
$30,000 plus an initial investment of $5,000 in inventory. What is the correct initial cash flow for your
analysis of the coffee shop opportunity?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F91019af8-fa19-4af7-881c-4fd113604dcd%2Fae7cac1f-b09d-4c10-ad2a-dca80b2877a7%2F3wp7ire_processed.png&w=3840&q=75)
Transcribed Image Text:19. 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 $100,000, and if you sold it today, you would net
$115,000 after taxes. Outfitting the space for a coffee shop would require a capital expenditure of
$30,000 plus an initial investment of $5,000 in inventory. What is the correct initial cash flow for your
analysis of the coffee shop opportunity?
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