#11

11. Your company purchased a piece of land five years ago for $150,000 and subsequently added $175,000 in improvements. The current book value of the property is $225,000. There are two options for future use of the land: 1) the land can be sold today for $375,000 on an aftertax basis: 2) your company can destroy the past improvements and build a factory on the land. In consideration of the factory project, what amount (if any) should the land be valued at? The present book value of $225.000 The aftertax salvage value of $375,000 The sales price of $375,000 less the book value of the improvements. d. The original $150,000 purchase price of the land itself. e. The property should be valued at zero since it is a sunk cost