Used as the initial cash flow for building project

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Dilwater Furniture purchased a corner lot in Pittsburg five years ago at a cost of $990,000. The lot was recently appraised at $1,120,000. At the time of the purchase, the company spent $87,000 to grade the lot and another $129,000 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 $2.3 million. What amount should be used as the initial cash flow for this building project? A. $2,300,000 B. $3,506,000 C. $3,636,000 D. $3,420,000

Farris Industrial purchased a machine five years ago at a cost of $164,900. The machine is being depreciated using the straight-line method over eight years. The tax rate is 21 percent and the discount rate is 14 percent. If the machine is sold today for $42,500, what will the aftertax salvage value be? A. $31,794.72 B. $49,268.13 C. $38,439.13 D. $46,560.88

Kustom Cars purchased a fixed asset two years ago for $39,000 and sold it today for $19,000. The assets are classified as 5-year property for MACRS. The MACRS table values are 0.2000, 0.3200, 0.1920, 0.1152, 0.1152, and 0.0576 for Years 1 to 6, respectively. What is the net cash flow from the salvage value if the tax rate is 21 percent? $18,941 $18,020 $18,902 $19,000

Reference no: EM132003372

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