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A corporate law firm is evaluating a new project: they are considering adding a corporate tax law practice. To accomplish they will hire two new senior attorneys, five associates and other staff. To house this additional staff, they will need to use an additional floor in the office building, which they already own. When they analyze the project, they consider the use of space they already own as "free." What mistake are they clearly making?

A. They are neglecting necessary working capital investments
B. They are ignoring the opportunity cost of using the additional space
C. They are including sunk costs in their analysis D. They aren't including erosion of their other projects

User TCC
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1 Answer

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The answer is……..B……..
User Mark Beaton
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