A firm owns a building with a book value of $150,000 and a market value of $250,000. If the firm uses the building for a project, then its opportunity cost, ignoring taxes, is
A)$100,000.
B)$150,000.
C)$250,000.
D)$400,000.

Question

Quizplus · Accepted Answer

The opportunity cost of using the building for a project is its market value, which is $250,000, because that is the value the firm forgoes by not selling it at its current market price.

A Firm Owns a Building with a Book Value of $150,000