Two years ago, Amys Inc. purchased land at a price of $3,000,000 plus $460,000 in real estate costs. Today, this new land has a market value of $4,000,000. The firm is now considering building a factory on that land. The construction cost of the factory is estimated at $295,000. In addition, $70,000 worth of leveling the surface of the land will be required to prepare the construction site. What is the initial cash flow of this project? Explain your answer in detail.

Kenny, Inc., is looking at setting up a new manufacturing plant in South Park. The company bought some land six years ago for $7.5 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 $10.3 million if it were sold today. The company now wants to build its new manufacturing plant on this land; the plant will cost $21.5 million to build, and the site requires $900,000 worth of grading before it is suitable for construction. What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project? (Do not round intermediate calculations and enter your answer in dollars, not millions, rounded to the nearest whole number, e.g., 1,234,567.) Cash flow

Riverview Company is evaluating the proposed acquisition of a new production machine. The machine's base price is $200,000, and installation costs would amount to $28,000. Also, $10,000 in net working capital would be required at installation. The machine will be depreciated for 3 years using simplified straight line depreciation. The machine would save the firm $110,000 per year in operating costs. The firm is planning to keep the machine in place for 2 years. At the end of the second year, the machine will be sold for $100,000. Riverview has a cost of capital of 12% and a marginal tax rate of 34%. What is the NPV of the project? -$9.783 $3,875 O$9,555 $12,155 $19,016

Nguyen Inc. is considering the purchase of a new computer system (ICX) for $110,000. The system will require an additional $20,000 for installation. If the new computer is purchased it will replace an old system that has been fully depreciated. The new system will be depreciated over a period of 8 years using straight-line depreciation. If the ICX is purchased, the old system will be sold for $10,000. The ICX system, which has a useful life of 8 years, is expected to increase revenues by $34,000 per year over its useful life. Operating costs are expected to decrease by $3,000 per year over the life of the system. The firm is taxed at a 40 percent marginal rate. Round your answers to the nearest dollar. What net investment is required to acquire the ICX system and replace the old system? $   Compute the annual net cash flows associated with the purchase of the ICX system. $

The Baltic Company is considering the purchase of a new machine tool to replace an obsolete one.  The machine being used for the operation has a current book value of $80,000, with an annual depreciation expense of $8,000.  It has a resale value today of $40,000, is in good working order, and will last, physically, for at least 10 more years.  The proposed machine will perform the operation so much more efficiently that Baltic engineers estimate that labor, material, and other direct costs of the operation will be reduced $60,000 a year if it is installed.  The proposed machine costs $240,000 delivered and installed, and its economic life is estimated at 10 years, with zero salvage value.  The company expects to earn 14 percent on its investment after taxes (14 percent is the firm's cost of capital).  The tax rate is 22 percent, and the firm uses straight-line depreciation.  Any gain or loss on the sale of the machine at retirement is subject to tax at 40 percent.    Would it be better…

Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land 12 years ago for $3,776,276 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 $3,278,390. An engineer was hired to study the land at a cost of $748,629, and her conclusion was that the land can support the new manufacturing facility. The company wants to build its new manufacturing plant on this land; the plant will cost $5,555,713 million to build, and the site requires $1,384,583 worth of grading before it is suitable for construction. What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project?