The project to convert the infrastructure into an office complex that will generate annual revenues of US$600.0G0 and annual operation and maintenance costs representing 35% of profits is being studied. To do this, U5 1,000,000 must be invested in the remodeling of the building that lasts two years (equal expense each year). The total of the improvements can be depreciated over 7 years straight line, with no residual value. The remodeling will allow the building to be used for 7 years, at the end of which it can be sold for 3,000,000 Perform incremental cash flow in excel and graph with bar chart.

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter11: Capital Budgeting And Risk
Section: Chapter Questions
Problem 15P
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The owner of an industrial warehouse receives US$700,000. per year for leases. Monthly operation and maintenance expenses are US 160D0. The remaining useful life of the building is 9 years, at the end of which the building can be sold for US$5,000.0G0 The building has already been fully depreciated, also consider the 15% employee participation and a tax on 10% rent.
The project to convert the infrastructure into an office complex that will generate annual revenues of US$600.0G0 and annual operation and maintenance costs representing 35% of profits is being studied.
To do this, U5 1,000,000 must be invested in the remodeling of the building that lasts two years (equal expense each year). The total of the improvements can be depreciated over 7 years straight line, with no residual value. The remodeling will allow the building to be used for 7 years, at the end of which it can be sold for 3,000,000


Perform incremental cash flow in excel and graph with bar chart.

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