SciTE Industries purchased a corner lot in five years ago at a cost of $659 thou

Question

SciTE Industries purchased a corner lot in five years ago at a cost of $659 thousand. The lot was recently appraised at $815 thousand. At the time of the purchase, the company spent $41 thousand to grade the lot and another $14 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 $1.05 million. What amount should be used as the initial cash flow for this building project?

Explanation / Answer

Hi, Please find the answer as follows: CF0 = -815000 - 1050000 = -1865000 Thanks, Aman

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