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Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park...

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Finance

Parker & Stone, Inc., is looking at setting up a newmanufacturing plant in South Park to produce garden tools. Thecompany bought some land 3 years ago for $4798465 in anticipationof using it as a warehouse and distribution site, but the companyhas since decided to rent these facilities from a competitorinstead. If the land were sold today, the company would net$3848715. An engineer was hired to study the land at a cost of$823164, and her conclusion was that the land can support the newmanufacturing facility. The company wants to build its newmanufacturing plant on this land; the plant will cost $4984348million to build, and the site requires $1185814 worth of gradingbefore it is suitable for construction. What is the proper cashflow amount to use as the initial investment in fixed assets whenevaluating this project?

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