Paul Owns a Home on the Top of a Hill

question 39

Multiple Choice

Paul owns a home on the top of a hill and enjoys an unobstructed view of a large wooded area.The view was a large factor in his decision to buy the house and Paul values his view at $5,000 per month.Sid purchases the undeveloped wooded area with plans to build a retail shopping centre.Sid expects to earn $10,000 a month from the shopping centre,which is $3,000 more than his next best alternative.
-Refer to the information above.The difference between the value Paul receives from the view and his payment for the view is

• A) $0.
• B) $3,000.
• C) $5,000.
• D) $10,000.
• E) unknown,since there is insufficient information to calculate this.

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