Question parker amp stone inc is looking at setting up a, Ask an Expert

Finance

Question: Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land 8 years ago for $7 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent these facilities from a competitor instead. If the land were sold today, the company would net $9.4 million. The company wants to build its new manufacturing plant on this land; the plant will cost $16.2 million to build, and the site requires $1,316,000 worth of grading before it is suitable for construction.

Required: What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project?

View complete question

Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M92864752

Have any Question?Write your Review or question?

Related Questions in Basic Finance

Every year for the past five years flights r us has paid a

Every year for the past five years, Flights 'R Us has paid a constant dividend of $2.50 per share. Next year and every year after, Flights 'R Us will increase the dividend rate 2.5% per year. If investors require a 15% r ...

The winner of the first annual tom morris golf invitational

The winner of the first annual Tom Morris Golf Invitational won $110 in the competition which was held in 1900. In 2015, the winner received $1,470,000. If the winner's purse continues to increase at the same interest ra ...

Why might a firm announcing it will borrow more be taken as

Why might a firm announcing it will borrow more be taken as a good news signal?

Corn in has an odd dividend policy the company has just

Corn, In., has an odd dividend policy. The company has just paid a dividend of $6 per share and has announced that it will increase the dividend by $2 per share for each of the next four years, and then never pay another ...

Bond a is a 1-year zero-coupon bond bond b is a 2-year

Bond A is a 1-year zero-coupon bond. Bond B is a 2-year zero-coupon bond. Bond C is a 2-year 10% coupon bond that pays annually. The yield to maturity (annually compounded) on bond A is 10%, and the price of bond B is $8 ...

Brenda wants to invest in a bank cd that will pay her 626

Brenda wants to invest in a bank CD that will pay her 6.26 percent compounded quarterly. How many years will it take to triple her initial investment?

Question - bad boys inc is evaluating its cost of capital

Question - Bad Boys, Inc. is evaluating its cost of capital. Under consultation, Bad Boys, Inc. expects to issue new debt at par with a coupon rate of 8% and to issue new preferred stock with a $2.50 per share dividend a ...

Dia lucrii inc has 325000 shares of cumulative preferred

Dia Lucrii, Inc. has 325,000 shares of cumulative preferred stock outstanding. The stock is supposed to pay $2.18 in dividends per share each quarter. Due to an unexpected event, the company has missed the last two quart ...

Your company has an opportunity to invest in a project that

Your company has an opportunity to invest in a project that is expected to result in after-tax cash flows of $16,000 the first year, $18,000 the second year, $21,000 the third year, $24,000 the fourth year, $28,000 the f ...

The common shares of twitter inc recently traded on the new

The common shares of Twitter Inc. recently traded on the New York Stock Exchange for $21.10 per share. You have employee stock options to purchase 1000 Twitter shares for $19.90 per share. The options expire in three yea ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Basic Finance Expert