Your company purchased a piece of land five years ago for $125,000 and subsequently added $275,000 in improvements. The current book value of the property is $225,000. There are two options for future use of the land: 1) the land can be sold today for $385,000 on a net after-tax basis; 2) your company can destroy the past improvements and build a factory on the land. In consideration of the factory project, what amount (if any) should the land be valued at?

Select one:

a. $225,000

b. $125,000

. c. The property should be valued at zero since it is a sunk cost.

d. $150,000.

e. $385,000.