Samson\'s purchased a corner lot five years ago at a cost of $640,000. The lot w

Question

Samson's purchased a corner lot five years ago at a cost of $640,000. The lot was recently appraised at $820,000. At the time of the purchase, the company spent $50,000 to grade the lot and another $4,000 to build a small building on the lot to house a parking lot attendant who has overseen the use of the lot for daily commuter parking. The company now wants to build a new retail store on the site. The building cost is estimated at $1.5 million. What amount should be used as the initial cash flow for this building project?

Explanation / Answer

Hi, Initial cash flow would be: 820000 + 1500000 = 2320000 Thanks,

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