Problem 10-1 Relevant Cash Flows (LO1] Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land six years ago for $4.3 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent these facilities from a competitor instead. If the land were sold today, the company would net $4.6 million. The company wants to build its new manufacturing plant on this land; the plant will cost $11.8 million to build, and the site requires $700,000 worth of grading before it is suitable for construction. What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.) Cash flow amount $ 20,250,000 Your small remodeling business has two work vehicles. One is a small passenger car used for job-site visits and for other general business poses. The other is a heavy truck used to haul equipment. The car gets 25 miles pellon (mpg). The truck gets 10 mpg. You want to improve gas mileage to save money, and you have enough money to upgrade one vehicle. The upgrade cost will be the same for both vehicles. An upgraded car will get 40 mpg; an upgraded truck will get 12.5 mpg. The cost of gasoline is $3.50 per gallon. Calculate the annual fuel savings, in gallons, for the truck and car assuming both vehicles are driven 10,000 miles per year. (Round your answers to 2 decimal places, e.g., 32.16.) Truck Fuel savings 340.00 gallons per year 255.00 gallons per year Car Assuming an upgrade is a good idea in the first place, which one should you upgrade? Both vehicles are driven 10,000 miles per year. Car O Truck Problem 10-10 Calculating Project NPV (LO1) Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.37 million. The fixed asset will be depreciated straight- line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $1,780,000 in annual sales, with costs of $690,000. The tax rate is 24 percent and the required return on the project is 11 percent. What is the project's NPV? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, and round your answer to 2 decimal places, e.g., 1,234,567.89.) nces NPV TS 117.701.58