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Why are these the correct answers? Please show all work and formulas Your furntiure company has a warehouse that just became available to use. You
Why are these the correct answers? Please show all work and formulas
Your furntiure company has a warehouse that just became available to use. You paid a consulting company $15,000 to come up with a recommendation for how best the warehouse could be utilized, and it recommends manufacturing wooden chairs. Manufacturing the chairs would require an investment of $112,000 in a new wood turning machine and an initial investment of $4,800 in wood inventory. The consulting company estimates that the machine could produce 1,000 chairs per year, resulting in a cash flow of $22,500 annually from the sale of the chairs. If you didn't manufacture the chairs, the warehouse could be sold today for $103,000. Identify the relevant incremental cash flows below: (Select all the choices that apply.) A. Amount you could sell the warehouse for today. B. Capital expenditure to purchase the new wood turning chine. C. Cash flow from the sale of chairs. D. Amount paid to the consulting company. E. Initial investment in wood inventoryStep by Step Solution
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