Question

A parcel of corporate land was recently dedicated as the new plant site. What is the opportunity cost of land that should be considered, based on the following: original cost of $200,000, market value of $300,000, net book value of $200,000, a recent offer to purchase for $250,000.

Answer 1

Answer: $300,000

Step-by-step explanation:

• Opportunity cost is the value of the best available to you .
• An opportunity cost is mostly equal to the current market value.

Given, original cost of $200,000, market value of $300,000, net book value of $200,000, a recent offer to purchase for $250,000.

Highest value = market value = $300,000

Hence, the opportunity cost of land that should be considered as $300,000.