What is proper cash flow to use as the initial investment

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Reference no: EM131613099

Suppose that a company purchased some land 5 years ago for $1,000,000 and they now want to use this land to build a new manufacturing plant. Recently they received an offer from a commercial real estate firm to purchase the land for $1,500,000. However, the company prefers to build a plant on that land instead, assuming the project is profitable. To build the plant, they must first remove some trees and an existing structure at a cost of $500,000. The construction of the plant itself will cost $3,000,000. What is the proper cash flow to use as the initial investment for this project

Reference no: EM131613099

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