If the project requires additional investment in land and building, the cash flow will significantly changed. The land and the building will be requiring additional outflow. The land, being an asset whose value appreciates over time will have a higher disposable value at the end of the project's value. Meanwhile, the building will be depreciated to account for the natural wear and tear. At the end of the project's life, the building can be sold according to its salvage value. If these considerations are taken into account, the project will only be accepted if the present value of the salvage value of land and building will be able to offset the present value of their acquisition cost.
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