Homecraft Stores (HSI), which operates a chain of retail warehouse-type stores, is considering opening a new store in the Tampa area. The store itself will cost $7,000,000 to build. In addition, fixtures for the store are expected to cost $700,000, and installation of the fixtures is estimated to cost another $50,000. Initial net working capital (primarily due to inventory) is expected to be $600,000. HSI plans to build the Tampa store on land it purchased five years ago for $200,000. The land is presently worth $500,000 and is expected to remain at $500,000 while the store is being built. Calculate the net investment for the proposed Tampa store.
Homecraft Stores (HSI), which operates a chain of retail warehouse-type stores, is considering opening a new store in the Tampa area. The store itself will cost $7,000,000 to build. In addition, fixtures for the store are expected to cost $700,000, and installation of the fixtures is estimated to cost another $50,000. Initial net working capital (primarily due to inventory) is expected to be $600,000. HSI plans to build the Tampa store on land it purchased five years ago for $200,000. The land is presently worth $500,000 and is expected to remain at $500,000 while the store is being built. Calculate the net investment for the proposed Tampa store.
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter26: Capital Budgeting (capbud)
Section: Chapter Questions
Problem 1R
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Homecraft Stores (HSI), which operates a chain of retail warehouse-type stores, is considering opening a new store in the Tampa area. The store itself will cost $7,000,000 to build. In addition, fixtures for the store are expected to cost $700,000, and installation of the fixtures is estimated to cost another $50,000. Initial net working capital (primarily due to inventory) is expected to be $600,000. HSI plans to build the Tampa store on land it purchased five years ago for $200,000. The land is presently worth $500,000 and is expected to remain at $500,000 while the store is being built. Calculate the net investment for the proposed Tampa store.
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