Question
Frodo Corp. purchased a corner lot in the Shire five years ago at a cost of $720573 in order to sell gold jewelry to black-caped
Frodo Corp. purchased a corner lot in the Shire five years ago at a cost of $720573 in order to sell gold jewelry to black-caped men with questionable attitudes. The lot was recently appraised at $907213. At the time of the purchase, the company spent $50,000 to grade the lot and another $4,000 to build a small building on the lot to house a parking lot attendant who has 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 $1052558. What amount should be used as the initial cash flow for this building project?
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