Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park toproduce garden tools. The company bought some land six years ago for $2.8 million inanticipation of using it as a warehouse and distribution site, but the company has sincedecided to rent these facilities from a competitor instead. If the land were sold today,the company would net $3.2 million. The company wants to build its new manufacturingplant on this land; the plant will cost $14.3 million to build, and the site requires$825,000 worth of grading before it is suitable for construction. What is the proper cashflow amount to use as the initial investment in fixed assets when evaluating this project?Input area:Purchase priceAppraised valueCost to buildGrading costs(Use cells A6 to B9 from the given information to complete this question. Enter a "0" for any costthat should not be included.)Output area:Purchase priceAppraised valueCost to build$2,800,000$3,200,000$14,300,000$825,000Grading costsTotal initial cost

Proper cash flow for the Initial investment or the Initial cost= Opportunity cost of the land + Cost…

Answered: Parker & Stone, Inc., is looking at…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

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Problem 30P: Mallette Manufacturing, Inc., produces washing machines, dryers, and dishwashers. Because of...

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