Opportunity cost. Revolution Records will build a new recording studio on a vacant lot next to the operations center. The land was purchased five years ago for $$410,000.$

Today, the value of the land has appreciated to $$730,000.$ Revolution Records did not consider the value of the land in its NPV calculations for the studio project $($it had already

spent the money to acquire the land long before this project was considered$).$ The NPV of the recording studio is $$570,000.$ Should Revolution Records have considered the land

as part of the cash flow of the recording studio? If yes, what value should be used, $$410,000$ or $$730,000?$ How will the value affect the project?

Should Revolution Records have considered the land as part of the cash flow of the recording studio? $($Select the best response.$)$

A$.$ No$.$

B$.$ Yes.

What value should be used, $$410,000$ or $$730,000?($Select the best response.$)$

A$.$ $$730,000$

B$.$ $$0$

C$.$ $$410,000$

How will the value affect the project? $($Select the best response.$)$

A$.$ The value of the land does not affect the project at all.

B$.$ If the NPV without considering this cost is $$570,000$ for the studio then Revolution Records could just sell the land and have $$730,000$ as cash income.