Answer:
$150,300
Explanation:
The computation of the correct initial cash flow is shown below:
= Capital expenditure + net after taxes + initial investment in inventory
= $33,000 + $112,000 + $5,300
= $150,300
The net after taxes is also term as opportunity cost
And, the initial investment in inventory is also term as change in working capital
All other information which is given is not relevant. Hence, ignored it
The initial cashflow for the analysis of the coffee shop opportunity is $150,300.
A cash flow analysis finds out the working capital of the company. It determines the amount of money acquirable to hurry business operations and absolute transactions.
It is computed by subtracting the value of current assets with the current liabilities.
The net after taxes is also called as opportunity cost.
And, the initial investment in inventory is also term as change in working capital.
Computation of the cashflow analysis:
The formula for the initial cashflow are shown as:
[tex]=\text{Capital Expenditure+ Net After Taxes + Initial Investment in Inventory}[/tex]
According to the given information,
Capital expenditure = $33,000
Net after Tax = $112,000
Initial investment in inventory = $5,300
Now, apply the given values in the above formula, we have
[tex]=\text{Capital Expenditure+ Net After Taxes + Initial Investment in Inventory}\\\\=\$33,000 + \$112,000 + \$5,300\\\\= \$150,300[/tex]
Therefore, the initial cash flow is $150,300.
Learn more about cashflow, refer to:
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