OMI is planning to build a new branch on land it already owns. The land was purchased several years ago for $250,000. Recently, OMI was offered $ 350,000 for the land. OMI estimates that if they build the branch, it will create NPV = $400,000. OMI did not consider the valued in this NPV calculations. Given this information, what is the opportunity cost to OMI of building the proposed branch?

Answers:

a. $400,00

b. $50,000

c. $350,000

d. $100,000

e. $250,000