Question
Your firm is considering building a new office complex. Your firm already owns property suitable for the new complex. The current book value of the
Your firm is considering building a new office complex. Your firm already owns property suitable for the new complex. The current book value of the property is $15,606. However, a commercial real estate agent has informed you that an outside buyer is interested in purchasing the property for $51,937. When calculating the NPV of your new office complex, what would be the appropriate incremental cash flow for using the property? The firms tax rate is 32%. Be certain to place a negative sign in your answer if the transaction would be accounted for as a cash outflow.
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