Osborne Books - Level 4 synoptic workbook, page 29, task 4

Hello, can anyone please explain the calcluation for task 4 in Level 4 synoptic workbook, page 29?
i don't understand why the cash flow amount has to minus 60K. The answer shows in the book for the cash flow in Y1 is (275k+50k-60k)=265K

I have attached the quesiton.
Thanks
Haili
i don't understand why the cash flow amount has to minus 60K. The answer shows in the book for the cash flow in Y1 is (275k+50k-60k)=265K

I have attached the quesiton.
Thanks
Haili
0
Comments
If the plant is open:
£275,000 is made including £50,000 in management cost
If the plant is closed
The management cost still occurs and £60,000 is gained at another site.
Therefore cash flow
=£275,000 (made from being open) + £50,000 (cost occurs either way) - £60,000 (Income that would occur even if closed)
ACCA in progress
F4- Passed Aug 2020
F5- Planned for Dec 2020
F6- Passed Sep 2020
F7
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