Parker & Stone, Inc., is looking at setting up a new
manufacturing plant in South Park...
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Parker & Stone, Inc., is looking at setting up a newmanufacturing plant in South Park to produce garden tools. Thecompany bought some land six years ago for $5.5 million inanticipation of using it as a warehouse and distribution site, butthe company has since decided to rent these facilities from acompetitor instead. If the land were sold today, the company wouldnet $5.8 million. The company wants to build its new manufacturingplant on this land; the plant will cost $13 million to build, andthe site requires $820,000 worth of grading before it is suitablefor construction. What is the proper cash flow amount to use as theinitial investment in fixed assets when evaluating this project?(Enter your answer in dollars, not millions of dollars,e.g. 1,234,567.)
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