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Initial investment in fixed assets

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Kilworth Plexiglass inc. is looking to set up a new manufacturing plant to produce surfboards. The company bought some land seven years ago for $12 million in anticipation of using it as a warehouse and distribution site, but the company decided to rent the facilities from a competitor instead. The land was appraised last week for $962.0DG. The compamir wants to build its new manufacturing plant on this land; the plant will cost $25 million to build. and the site recuires an additional $536,u?{l in grading before it will be suitable for construction. What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project? Why?

Reference no: EM132022835

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