Question
Mizzou is considering building a new multipurpose sports building if they are able to gain approval from tax payers in the state of Missouri. Assume
Mizzou is considering building a new multipurpose sports building if they are able to gain approval from tax payers in the state of Missouri. Assume the life of the project is five years, and then the building will be sold to the City of Columbia. If the expansion costs include $50 million in building costs and $5 million in lobbying costs that must be paid regardless of the projects status, the initial investment outlay is and these cash flows occur in period _______. Additionally, if the new building requires the University of Missouri to set aside an additional $5 million in cash today, the change in net working capital is an __________ of $5 million which occurs today and reverses in period 5.
$50 million; 0; increase
$55 million; 0; decrease
$50 million; 0; decrease
$50 million; 1; increase
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