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3. A firm manager decides to build a new factory on a lot owned by the firm that could be sold to a local developer
3. A firm manager decides to build a new factory on a lot owned by the firm that could be sold to a local developer for 1,250,000 SAR. The lot was purchased for 500,000 SAR twenty years ago. When determining the value of the new store project a. the cost of the lot is zero since the corporation already owns it b. the opportunity cost of the lot is 1,250,000 SAR and should be included in calculating the value of the project c. the cost of the lot for valuation purposes is 500,000 SAR because land does not depreciate d. the incremental cash flow should be the 500,000 SAR original cost less accumulated amortization
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