Five years ago, Rednip Ltd purchased a block of land to establish manufacturing operations. They spent $1 million for the 4 acres of land, which was significantly larger than what they needed to conduct operations at the time. In fact they could have gotten away with spending only $700,000 on a smaller parcel of land. Now they are considering building a new factory on the site in response to an increase in demand for their product. It will cost them $200,000 to construct the new buildings on the