MArshalls & Co. Purchased a corner lot in Elgon City five years ago at a cost of

Question

MArshalls & Co. Purchased a corner lot in Elgon City five years ago at a cost of $750000. The lot was recently appraised at $815,000. At the time of the purchase, the company spent $55,000 to grade the lot and another $3900 to build a small building on the lot to house a parking lot attendant who was overseen the use of the lot for daily commuter parking. The company now wants to build a new retail store on the site. The building cost is estimated at $1,180,000. What ammount should be used as the intial cash flow for this bulding project?

Explanation / Answer

intial cash flow for this bulding project = $815000 + $1,180,000=1995000

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