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Opportunity cost.??Revolution Records will build a new recordingstudio on a vacant lot next to the operations center. The land waspurchased five years ago for ?$480 comma 000. ? Today, the value ofthe land has appreciated to ?$790 comma 000. Revolution Records didnot consider the value of the land in its NPV calculations for thestudio project? (it had already spent the money to acquire the landlong before this project was? considered). The NPV of the recordingstudio is ?$580 comma 000. Should Revolution Records haveconsidered the land as part of the cash flow of the recording?studio? If? yes, what value should be? used, ?$480 comma 000 or?$790 comma 000?? How will the value affect the? project?
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