Answer:
The pre-tax net cash outflow= $250,000
Explanation:
The pretax net cash flow would be the sum of the cash inflow from the purchase of the existing building and the cost of the larger facility.
Kindly note that the cost of the existing building is a sunk cost which does not represent cash flow. Similarly, the current is the current book value which represents the unconsumed accounting historical balance depreciation
The net cash flow a= 500,000 - 750,000 = (250,000)
The pre-tax net cash outflow= $250,000
