(Relevant cash flows) Kenny, Inc is looking at setting up a new manufacturing plant in South Park. The company bought some land six years ago for $9.5 million in anticipation of using it as a...


(Relevant cash flows) Kenny, Inc is looking at setting up a new manufacturing plant in South Park. The company bought some land six<br>years ago for $9.5 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent facilities<br>elsewhere. The land would net $8.5 million if it were sold today. The company now wants to build its new manufacturing plant on this land;<br>the plant will cost $2.6 million to build, and the site requires $700,000 worth of grading before it is suitable for construction. When<br>evaluating this project, the proper cash flow amount to use as the initial investment in fixed assets is $<br>million.<br>

Extracted text: (Relevant cash flows) Kenny, Inc is looking at setting up a new manufacturing plant in South Park. The company bought some land six years ago for $9.5 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent facilities elsewhere. The land would net $8.5 million if it were sold today. The company now wants to build its new manufacturing plant on this land; the plant will cost $2.6 million to build, and the site requires $700,000 worth of grading before it is suitable for construction. When evaluating this project, the proper cash flow amount to use as the initial investment in fixed assets is $ million.

Jun 10, 2022
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