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lora16 [44]
4 years ago
3

High Breeze currently produces boat sails and is considering expanding into awnings for homes and travel trailers. The company o

wns land that could be used for the expansion. This land was purchased five at a cost of $319,000 and is valued today at $395,000. The company has some unused equipment that it currently owns valued at $38,000. This equipment could be used for producing awnings if $12,000 is spent for equipment modifications. Other equipment costing $138,000 will also be required. What is the amount of the initial cash flow for this expansion project
Business
1 answer:
spin [16.1K]4 years ago
0 0

Answer:

- $583,000

Explanation:

The computation of the initial investment is shown below:

= - (Today value price of land + current value of unused equipment + producing awnings cost + cost of other equipment)

= - ($395,000 + $38,000 + $12,000 + $138,000)

= - $583,000

The initial investment should always be displayed in a negative sign.

All other information which is given is not relevant. Hence, ignored it

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