A Firm Owns a Building with a Book Value of $150,000

question 34

Multiple Choice

A firm owns a building with a book value of $150,000 and a market value of $250,000. If the firm uses the building for a project, then its opportunity cost, ignoring taxes, is

• A)$100,000.
• B)$150,000.
• C)$250,000.
• D)$400,000.

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Definitions:

Regulations

Rules and guidelines issued by governmental agencies to control or direct the conduct of activities.

Foreign Currency

Currency other than the functional currency of the entity, used in international transactions or financial statements.

Reporting Currency

The reporting currency is the currency used to present the financial statements of a company, usually the domestic currency of the country where the company is located.

Gains or Losses

Financial increases or decreases in equity resulting from business activities or investments not directly related to the company’s main operations.