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lord [1]
3 years ago
15

Marshall's & Co. purchased a corner lot in Eglon City five years ago at a cost of $640,000. The lot was recently appraised a

t $810,000. At the time of the purchase, the company spent $50,000 to grade the lot and another $4,000 to build a small building on the lot to house a parking lot attendant who has overseen the use of the lot for daily commuter parking. The company now wants to build a new retail store on the site. The building cost is estimated at $1.2 million. What amount should be used as the initial cash flow for this building project?
Select one:

a. $1,200,000

b. $1,840,000

c. $1,890,000

d. $2,010,000

e. $2,060,000
Business
1 answer:
goldfiish [28.3K]3 years ago
3 0

Answer:

Option (d) is correct.

Explanation:

Given that,

Cost of corner lot = $640,000 (five years ago)

Lot was recently appraised = $810,000

Spent on to grade the lot = $50,000

Spent on to build a small building on the lot = $4,000

Estimated building cost for new retail store = $1.2 million

                                                                        = $1,200,000

Therefore,

Initial cash flow for this building project:

= Estimated building cost + Appraised value of lot

= $1,200,000 + $810,000

= $2,010,000

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Answer:

Andrew did do a proper feasibility study about the land

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which is more than the  10,000 dollars

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3 years ago
McVeigh Corp. owns 40% of Gondor Company's common stock. McVeigh received $41,200 in cash dividends from Gondor. The entry to re
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3 years ago
The data analysis process phases are ask, prepare, process, analyze, share, and act. What do data analysts do during the ask pha
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The thing which the data analysts do during the ask phase are:

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<h3>What is Data Analysis?</h3>

This refers to the use of data to find out the similarity and differences between the different data and how to use it to solve problems.

With this in mind, we can see that during the data analysis process phases, we can see that they include:

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7 0
2 years ago
You are given the following information concerning Parrothead Enterprises:
Alenkinab [10]

Answer:

7.85%

Explanation:

Face value of bond =$2000

Price of current bond= face value× 106.5% = $2130

Term= 25 years×2= 50 period

Coupon rate= 7%×1/2= 3.5%

Coupon amount= coupon rate×face value = $2000×3.5/100

         =$70 for a period

YTM of bond= [coupon amount+ (maturity value-current price)/Term]/0.6×current price+0.4×maturity value]

YTM of bond= 6.487% per annum

Total market value of bond= 8,400bonds× $2130= $17,892,000

Market value of common stock= 275,000shares × 62.50= $18012500

Weight of common stock= 0.490009385

Weight of preferred stock= 0.023259294

WACC= Wd* Kd + Wc*Kc + Wp*Kp

= 0.486731321× 4.86525% +

0.490009385× 10.9624275+

0.023259294× 4.7368421%

=7.849%

= 7.85%(rounded)

Thus, WACC is 7.85%

3 0
3 years ago
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