Question

Uptown Furniture purchased a corner lot 5 years ago at a cost of $670,000. The lot was recently appraised at $640,000. At the time of the purchase, the company spent $45,000 to grade the lot and another $100,000 to pave the lot for commuter parking. The company now wants to build a new retail store on the site. The building cost is estimated at $1.6 million. What amount should be used as the initial cash flow for this building project?

Answer 1

$ 2, 240, 000

Step-by-step explanation:

The amount that should be used as the initial = recent appraiser of the corner lot + the estimated cost of the building = $ 640000 + $ 1600000 = $ 2, 240, 000