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Unformatted text preview: 3) Opportunity Costs Consider * MUST consider; relevant to decision; finite capacity * Old Test Question Marshalls & Co. purchased a corner lot in Eglon City five years ago at a cost of $640,000 . The lot was recently appraised at $810,000 . At the time of the purchase, the company spent $50,000 to grade the lot and another $4,000 to build a small building on the lot to house a parking lot attendant who has overseen the use of the lot for daily commuter parking. The company now wants to build a new retail store on the site. The building cost is estimated at $1.2 million . What amount should be used as the initial cash flow for this building project? a. $1,200,000 b. $1,840,000 c. $1,890,000 d. $2,010,000...
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- Summer '11