Question

Red Dirt Products plans to open a new location of a national fast food chain restaurant on property it purchased 10 years ago for $44,239. If the land were sold today, the company would net $218,553. The restaurant will cost $1,122,908 to build, and the site requires $11,420 worth of preparation 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? DO NOT USE DOLLAR SIGNS OR COMMAS IN YOUR ANSWER. ENTER YOUR ANSWER TO THE NEAREST DOLLAR (e.g. 1250).

Answer 1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

projects (Autosaved) (Autosaved) (Autosaved) - Microsoft Excel (Product Activation Failed) Data Review View Add-Ins File Home Insert Page Layout Formulas - 2x % Cut 11 pt General AA = = = A E Wrap Text Merge & Center Σ AutoSum : A Fill 2 Sort & m Find & U D $ - % 8. Insert Delete Format Conditional Format Formatting as Table Styles Cell Styles 2 Clear Calibri E Copy Paste Format Painter B I Clipboard G019 - GM GN Filter Editing Select Alignment Number Cells Font fx Formula Bar GO GQ GR GSGT GU GY GW GX GY GZ 18 19 20 21 22 23 24 25 VALUE OF LAND TODAY ADD COST OF BUILDING ADD GRADING COST ANSWER (PROPER CASH FLOW] 218553 1122908 11420 1352881 26 27 NOTE: IF COMPANY GO TO BUY LAND TODAY, IT WILL BE AVAILABLE AT 218553 AND NOT AT A PRICE WHICH PURCHASED LONG BACK SO CURRENT VALUE OF LAND WILL BE THE COST FOR THE PURPOSE OF THE PROJECT 28 29 30 31 32 33 WITHOUT GRADING, LAND WILL NOT BE USBALE FOR THE PROJECT SO IT IS ALSO RELEVANT COST FOR THE PROJECT NOTE: IT IS AN OUTFLOW BUT NOTHING IS MENTIONED SO WRITTEN POSITIVE 34 35 36 H REPLACEMENTS HPR GMAM EAC MACRS NPV RELEVANT BETA LEVERED REPLACEMENT BOND i nvest, EAA MI-np-ir_ ferences: D117 Red OPTION TO WAIT STEIN indiffEPS EBIT LEASE STRAIGHI BOI 130% 0 + 1 = k = 4 4 l 7 ENG 2-20191