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Hill Top Lumber Company is considering building a sawmill in the state of Washington because the company doesn't have such a facility to service its
Hill Top Lumber Company is considering building a sawmill in the state of Washington because the company doesn't have such a facility to service its growing customer base that is located on the west coast. Hill Top's executives believe that future growth in west coast customers will make the sawmill project a good investment. When evaluating the acceptability of the project, which of the following would be considered a relevant cash flow that should be included when determining its initial investment outlay?
A | Hill Top spent $150,000 to prepare the feasibility report of the project |
B | The annual cash inflow of $2 million from another existing project that will continue unaffected by the new project |
C | The cost of an existing debt of the firm that will annually increase by 0.3 percent as per the lending terms of the debt |
D | The cost of $3 million incurred to clear the land on which Hill Top wants to build the sawmill |
E | It is estimated that $20 million of business from exisiting customers will move to the new sawmill |
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