SciTE Industries purchased a corner lot in five years ago at a cost of $612 thou

Question

SciTE Industries purchased a corner lot in five years ago at a cost of $612 thousand. The lot was recently appraised at $869 thousand. At the time of the purchase, the company spent $57 thousand to grade the lot and another $10 thousand 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 $1.22 million. What amount should be used as the initial cash flow for this building project?

Explanation / Answer

2,089,000

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