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Your Firm Purchased a Warehouse for $335,000 Six Years Ago

Question 45

Multiple Choice

Your firm purchased a warehouse for $335,000 six years ago. Four years ago,repairs were made to the building which cost $60,000. The annual taxes on the property are $20,000. The warehouse has a current book value of $268,000 and a market value of $295,000. The warehouse is totally paid for and solely owned by your firm. If the company decides to assign this warehouse to a new project,what value,if any,should be included in the initial cash flow of the project for this building?


A) $0
B) $268,000
C) $295,000
D) $395,000
E) $515,000

Correct Answer:

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