A group of investors planning to build a grocery store near the local mall spends $125,000 to buy the necessary land, put in the parking lot and lights for the parking lot. After completing these steps, they terminate the project when it is determined that another grocery store is being built right on the mall property. What option have the investors exercised? If, three years later the investors still own the land and its improvements (the parking lot) how should they value it if they are considering completing the grocery store as originally planned?

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The Answer of A group of investors planning to build a grocery store near the local mall spends $125,000 to buy the necessary land, put in the parking lot and lights for the parking lot. After completing these steps, they terminate the project when it is determined that another grocery store is being built right on the mall property. What option have the investors exercised? If, three years later the investors still own the land and its improvements (the parking lot) how should they value it if they are considering completing the grocery store as originally planned?

A Group of Investors Planning to Build a Grocery Store