KN Jewelers purchased some land four years ago at a cost of $218,001. They spent $45,000 to raze the old building and clear the lot. Today, the lot is valued at $237,000 and produces an annual income of $22,000 from its use as a parking lot. KN has drawn plans to construct a new retail store on this land. The lot preparation costs will be $28,000 and the building will cost $229,500. The initial cost of this project is:

Question

Quizplus · Accepted Answer

The initial cost of the project includes the current value of the land ($237,000), the lot preparation costs ($28,000), and the building cost ($229,500). Adding these together gives $237,000 + $28,000 + $229,500 = $494,500.

KN Jewelers Purchased Some Land Four Years Ago at a Cost