A corporate manager decides to build a new store on a lot owned by the

A corporate manager decides to build a new store on a lot owned by the corporation that could be
sold to a local developer for $250,000. The lot was purchased for $50,000 twenty years ago. When
determining the value of the new store project,

A) the opportunity cost of the lot is $250,000 and should be included in calculating the value of
the project.
B) the cost of the lot for valuation purposes is $50,000 because land does not depreciate.
C) the incremental cash flow should be the $50,000 original cost less accumulated amortization.
D) the cost of the lot is zero since the corporation already owns it.

ANSWER

A