ught the land for the new factory two years ago for $100; you believe that the land is now worth $150, but there are no known buyers for the property.  The new factory will cost $250 to build.  You expect to buy $150 of equipment and spend $35 installing it.  What is the amount of the initial investment for capital budge

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 8P
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You are building a new factory.  You bought the land for the new factory two years ago for $100; you believe that the land is now worth $150, but there are no known buyers for the property.  The new factory will cost $250 to build.  You expect to buy $150 of equipment and spend $35 installing it.  What is the amount of the initial investment for capital budgeting purposes?

A) 

$435

 

B) 

$535

 

C) 

$585

 

D) 

$250

 

E) 

$500

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