You have just completed a $25,000 feasibility study for a new coffee shop in some retail space you own. You bought the space two years ago for $97,000, and if you sold it today, you would net $114,000 after taxes. Outfitting the space for a coffee shop would require a capital expenditure of $31,000 plus an initial investment of $5,500 in inventory. What is the correct initial cash flow for your analysis of the coffee shop opportunity? Identify the relevant incremental cash flows below: (Select all the choices that apply.) A. Capital expenditure to outfit the space. O B. Initial investment in inventory. O C. Amount you would net after taxes should you sell the space today. O D. Feasibility study for the new coffee shop. O E. Price you paid for the space two years ago. Calculate the initial cash flow below: (Select from the drop-down menus and round to the nearest dollar.) 1 3 4 Free Cash Flow
You have just completed a $25,000 feasibility study for a new coffee shop in some retail space you own. You bought the space two years ago for $97,000, and if you sold it today, you would net $114,000 after taxes. Outfitting the space for a coffee shop would require a capital expenditure of $31,000 plus an initial investment of $5,500 in inventory. What is the correct initial cash flow for your analysis of the coffee shop opportunity? Identify the relevant incremental cash flows below: (Select all the choices that apply.) A. Capital expenditure to outfit the space. O B. Initial investment in inventory. O C. Amount you would net after taxes should you sell the space today. O D. Feasibility study for the new coffee shop. O E. Price you paid for the space two years ago. Calculate the initial cash flow below: (Select from the drop-down menus and round to the nearest dollar.) 1 3 4 Free Cash Flow
Chapter11: Cash Flow Estimation And Risk Analysis
Section: Chapter Questions
Problem 1gM
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