Q37. A company is considering the development of land acquired as an investment more than ten years ago. If developed, the property would then be used as an additional warehouse facility by the company. The company originally paid $400,000 for the undeveloped land and the company estimates the cost to develop the land for use as a warehouse to be $250,000. Alternatively, the undeveloped land could be sold today for $600,000. To determine the warehouse facility's net present value, which of the following is the most appropriate treatment of the land’s;

答案和详解如下：

Q37.   B  Study Session 11-47-b

Tire $400,000 original cost is a sunk cost that should not be considered in evaluating the net present value of the project under consideration; the $600,000 market value is an opportunity cost and should be considered in evaluating the project's net present value.

thx

b

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