Your Company Owns Land in a Busy Shopping District

question 36

Multiple Choice

Your company owns land in a busy shopping district. If the chair of the company's board of directors thinks they can build a plant on that land and that the land will incur no additional cost, the chair fails to take into account:

• A) capital expenditures
• B) opportunity costs
• C) sunk costs
• D) depreciation

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Definitions:

Part Performance

A doctrine that permits the courts to enforce an unwritten contract concerning land where certain conditions have been met.

Specific Performance

A legal remedy where a court orders a party to perform their obligations under a contract, rather than simply paying damages for breach.

Memorandum

A written record or communication used in business or diplomatic activities.

Statute of Frauds

A rule of law mandating that some agreements must be documented in written form to be legally binding.