CrossTown Builders is considering remodeling an old building it currently owns. The building was purchased ten years ago for $1.2 million. Over the past ten years, the firm rented out the building and used the rent to pay off the mortgage. The building is now owned free and clear and has a current market value of $1.9 million. The company is considering remodeling the building into industrial-type apartments at an estimated cost of $1.6 million. The estimated present value of the future income from these apartments is $4.1 million. Which one of the following defines the opportunity cost of the remodeling project?
1. Cost of the remodeling
2. Current market value of the building plus the remodeling costs
3. Current market value of the building
4. Present value of the future income
5. Initial cost of the building plus the remodeling costs
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “CrossTown Builders is considering remodeling an old building it currently owns. The building was purchased ten years ago for $1.2 million. ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
Suppose that three firms make up the entire tire manufacturing industry. One has a 50% market share, and the other two have a 25% market share each. The Herfindahl index of this industry is.
Answers (1)
Some countries have fixed exchange rate systems instead of flexible exchange rate systems. Which of the following is a reason why fixed exchange rate systems have limited abilities to use monetary policy? A.
Answers (1)
An investment of $13,000.00 with Barnes Bank earns a 2.36% APR compounded monthly. a. Write a function fthat determines the investment's valuc (in dollars) in terms of the number of years t since the investment was made j (t) - |13,000 (1+1.
Answers (1)
PA10. LO 6.4Carlton’s Kitchen’s three cost pools and overhead estimates are as follows: Compare the overhead allocation using: The traditional allocation method The activity-based costing method (Hint: the traditional method uses machine hours
Answers (1)
Since fixed costs remain constant in the short run, special orders should be accepted as long as the order price is greater than the variable costs. True or False True False
Answers (1)
New Questions in Business
Transactional leadership encompasses all but one of the following. Which one? A. Goal settingB. Social interactionC. Monitoring progress toward goal achievementD. Giving feedbackE. Administering discipline
Answers (1)
Average fixed costs for a given level of output can be determined graphically by: A. summing the marginal costs of any number of units of output and dividing the sum by that output. B. the vertical distance between TC and TVC. C.
Answers (1)
Ed moura has 60000 invested in stocks paying 7%. how much additional money should he invest in certificates of deposit paying 3% so that the average retrun on the two investments is 4%.
Answers (1)
On January 1, Whispering Winds Corp. had 90,000 shares of no-par common stock issued and outstanding. The stock has a stated value of $5 per share. During the year, the following occurred. Apr.
Answers (1)
On a 3-day fishing trip, 4 adults consumed food costing $60. for the same costs per person per day, what would be the cost of food consumed by 7 adults during a 5-day fishing trip?
Answers (1)