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:

Total Value

The aggregate worth of a good, service, product, or other item as perceived by its users.

Economic Income

An individual's total earnings, including wages, salaries, investments, and other sources, assessed for economic analysis.

Capital Gains

The profit earned from the sale of an asset or investment which has increased in value over the holding period.

Double Taxation

The imposition of two or more taxes on the same income, asset, or financial transaction.