Question
Westhouser Paper Company Located in the state of Washington, the company currently has an option to purchase a piece of land with good timber forest
Westhouser Paper Company
Located in the state of Washington, the company currently has an option to purchase a piece of land with good timber forest on it. It is now May 1, and the current price of the land is $2.2 million. Westhouser doesn't need the timber from this land until the beginning of July, but its top executives fear another company might buy the land between now & July.
If Westhouser purchases the land, it believes that it can gross $3 million. (This doesn't count the cost of purchasing the land.) But if it does not purchase the land, Westhouser believes that it can make $650, 000 from alternative investments.
What should the company do?
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