Mirage Co. has a large 2-story garage facility in downtown Columbia. The company has spent $1.0 million in renovation expenses. It can sell this garage now for $4 million. The company is now trying to decide if they should demolish this garage and build a much larger 5-story garage on the site. Demolition-and-Construction costs will be $3 million and the company expects to sell the new garage (if built) for $8 million in 2 years.

Which of the costs and values identified above should be or should not be included in the decision to demolish and build (or not) the new garage facility?

What is true?

I. $8.0 million should not be included.

II. $4.0 million should be included because it is an opportunity cost.

		I and II
		None of the above
		I only
		II only