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Your company plans to spend $1,950,000 cash to build a plant that will produce benefits with a total present value of $3,525,000. Your company already
Your company plans to spend $1,950,000 cash to build a plant that will produce benefits with a total present value of $3,525,000. Your company already owns the land on which it will build the plant. That land was purchased with cash several years ago for $500,000, which is the current book value of the land. The land could be sold for $1,525,000 after-tax today. What is the net present value of the proposed plant?
($450,000)
($50,000)
$0
$50,000
$1,575,000
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