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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 $97,000, and if you sold it today, you would net $112,000 after taxes. Outfitting the space for a coffee shop would require a capital expenditure of $34,000 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.) A. Initial investment in inventory. B. Price you paid for the space two years ago. C. Amount you would net after taxes should you sell the space today. D. Capital expenditure to outfit the space. E. Feasibility study for the new coffee shop. You purchased a machine for $1.16 million three years ago and have been applying straight-line depreciation to zero for a seven-year life. Your tax rate is 38%. If you sell the machine today (after three years of depreciation) for $798,000, what is your incremental cash flow from selling the machine? Your total incremental cash flow will be \$ (Round to the nearest cent.)
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