Question: Suppose that your brother-in-law has decided to start a company that produces synthetic lawns for senior homeowners. He anticipates starting production in 18 months. In estimating future cash flows of the company, which of the following items would be relatively easy versus relatively difficult to obtain? Also, suggest how each might be estimated with reasonable accuracy.
a. Cost of land for a 10,000-square-foot building.
b. Cost of the building (cinder block construction).
c. Initial working capital.
d. Total capital investment cost.
e. First year's labor and material costs.
f. First year's sales revenues.