25. Coug's Mart, a local supermarket, is considering an expansion project of adding a small deli shop inside the store. Coug's Mart owns a large corner space adjacent to the store and decides to utilize this corner space to host the deli shop. It acquired the corner space 5 years ago at a cost of $45,000. At the time of the purchase, Coug's Mart spent $12,000 on basic renovations, including pushing down a wall to link the space to the main store. The corner space can be rented out today and total value of renting income is estimated to be $55,000. Additional renovation costs will be $8,000 to make the deli shop functional and attractive. Coug's Mart has some unused kitchen equipment, which will be used for the deli project. This equipment can be sold for $9,500 today. Coug's Mart hired a local financial firm to help evaluate the deli project at a fee of $5,000. The company also spent another $2,000 to conduct surveys to analyze local demand for the deli shop. What is the amount of the total initial cash flow for this expansion project? A. $63,000 B. $72,500 C. $74,500 D. $79,500 E. None of the above

25. Coug's Mart, a local supermarket, is considering an expansion project of adding a small deli shop inside the store. Coug's Mart owns a large corner space adjacent to the store and decides to utilize this corner space to host the deli shop. It acquired the corner space 5 years ago at a cost of $45,000. At the time of the purchase, Coug's Mart spent $12,000 on basic renovations, including pushing down a wall to link the space to the main store. The corner space can be rented out today and total value of renting income is estimated to be $55,000. Additional renovation costs will be $8,000 to make the deli shop functional and attractive. Coug's Mart has some unused kitchen equipment, which will be used for the deli project. This equipment can be sold for $9,500 today. Coug's Mart hired a local financial firm to help evaluate the deli project at a fee of $5,000. The company also spent another $2,000 to conduct surveys to analyze local demand for the deli shop. What is the amount of the total initial cash flow for this expansion project? A. $63,000 B. $72,500 C. $74,500 D. $79,500 E. None of the above

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter13: Property Transactions: Determination Of Gain Or Loss, Basis Considerations, And Nonta Xable Exchanges

Section: Chapter Questions

Problem 24DQ

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