The company bought some land three years ago for $3.8 million in anticipation of using it as a toxic dump site for waste chemicals, but it built a piping system to safely discard the chemicals instead. The land was appraised last week for $4.6 million. In five years, the aftertax value of the land will be $5.0 million, but the company expects to keep the land for a future project. The company wants to build its new manufacturing plant on this land; the plant and equipment will cost $31.44 million to build. DEI’s tax rate is 40 percent. The project requires $1,125,000 in initial net working capital investment to get operational.
I need help finding the:
Cost of plant and equipment
Opportunity cost of land
Investment in additional net working capital
Initial cash outflow
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