A Manufacturing Firm Is Planning on Expanding Its Existing Operations

question 15

Multiple Choice

A manufacturing firm is planning on expanding its existing operations. The expansion project is significant and will require the firm to house the expansion in a different location. The firm is considering building on a lot they own across town. The lot is currently vacant and it was paid for nearly 20 years ago. Given this information, which of the following statements is correct?

• A) The lot is not an incremental cash flow because it is not being utilized at this time.
• B) The lot is an incremental cash flow because it represents an opportunity cost.
• C) The lot is an incremental cash flow because it represents a sunk cost.
• D) The lot is not an incremental cash flow because it has already been paid for.

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Definitions:

Vein

(1) A blood vessel that carries blood from the tissues toward a chamber of the heart (compare with artery). (2) A strand of vascular tissue that is part of the network of conducting tissue in a leaf; also called a vascular bundle.

Heart

The heart is a muscular organ in most animals, including humans, which pumps blood through the blood vessels of the circulatory system, supplying oxygen and nutrients to the body while removing carbon dioxide and other wastes.

Oxygen-Rich Blood

Blood that has been oxygenated in the lungs and is being transported to cells throughout the body.

Oxygen-Poor Blood

Blood that has given up its oxygen to nourish the body's cells and now contains a higher concentration of carbon dioxide, returning to the heart and lungs for oxygenation.