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You have just completed a $23,000 feasibility study for a new coffee shop in some retail space you own. You bought the space two years
You have just completed a $23,000 feasibility study for a new coffee shop in some retail space you own. You bought the space two years ago for $103,000, and if you sold it today, you would net $113,000 after taxes. Outfitting the space for a coffee shop would require a capital expenditure of $25,000 plus an initial investment of $4,700 in inventory. What is the correct initial cash flow for your analysis of the coffee shop opportunity? Identify the relevant incremental cash flows below: Select all the choices that apply.) LA. Amount you would net after taxes should you sell the space today B. Feasibility study for the new coffee shop. I C. Price you paid for the space two years ago. D. Capital expenditure to outfit the space. E. Initial investment in inventory Calculate the initial cash flow below: (Select from the drop-down menus and round to the nearest dollar.) 1 2 3 $ 4 Free Cash Flow $ 1 EA $ GA 2 3 Capital Expenditure (outfit of space) Capital Expenditure (price of space) Change in Net Working Capital Feasibility Study Cost Opportunity Cost 4 EA
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