McLain, Inc

McLain, Inc. currently produces boat sails and is considering expanding its operations to include awnings for homes and travel trailers. The company owns land beside its current manufacturing
Facility that could be used for the expansion. The company bought this land eight years ago at a
Cost of $500,000. At the time of purchase, the company paid $70,000 to level out the land so it
Would be suitable for future use. Today, the land is valued at $750,000. The company currently has
Some unused equipment which it currently owns valued at $40,000. This equipment could be used
For producing awnings if $10,000 is spent for equipment modifications. Other equipment costing
$400,000 will also be required. What is the amount of the initial cash flow for this expansion
Project?

A) -$870,000
B) -$1,020,000
C) -$1,200,000
D) -$1,620,000
E) -$2,020,000