If an investment project would make use of land which the firm currently owns,the project should be charged with
A)a sunk cost.
B)an opportunity cost.
C)amortization.
D)interest.

Question

Quizplus · Accepted Answer

The fact that the land is already owned by the firm means that it has no alternative use or value, thus it is not a sunk cost. However, by using the land for the investment project, the firm is giving up the opportunity to use it for any other potential venture, making it an opportunity cost. Amortization and interest are not relevant in this situation.

If an Investment Project Would Make Use of Land Which