Question
What is the feasibility expenditure treatment in cash flow statement? (Expense that used to conduct a study before the product being produce) example question below
What is the feasibility expenditure treatment in cash flow statement? (Expense that used to conduct a study before the product being produce)
example question below
The director of East West Bearings forgot to mention one important expenditure which their company has incurred in relation to the establishment of this new plant. This expenditure has taken place in the form of $55,000, which has been paid in two instalments or $27,500 on account of feasibility reports to Alpha Marketing Company. Feasibility report was used to explore marketability of their new bearings produced from the new plant. Both the instalments of $27,500 duly paid before the installation of the new plant in question. Now, once it has been told to your team, you need to demonstrate how you are going to take this feasibility amount into consideration for calculating Cash flows of the project as well as NPV of the plant?
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