The Boat Works Currently Produces Boat Sails and Is Considering

question 76

Multiple Choice

The Boat Works currently produces boat sails and is considering expanding its operations to include awnings.The expansion would require the use of land the firm purchased three years ago at a cost of $197,000 that is currently valued at $209,500.The expansion could use some equipment that is currently sitting idle if $7,500 of modifications were made to it.The equipment originally cost $387,500 five years ago,has a current book value of $132,700,and a current market value of $139,000.Other capital purchases costing $520,000 will also be required.What is the value of the opportunity costs that should be included in the initial cash outflow for the expansion project?

• A)$425,000
• B)$485,000
• C)$329,700
• D)$348,500
• E)$537,200

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Definitions:

National Culture

The set of shared values, beliefs, customs, practices, and social behaviors that characterize the people of a particular country or nation.

Robert House

An influential scholar in the field of organizational behavior, best known for developing the Path-Goal Theory of leadership.

Ethnocentric Staffing Model

The ethnocentric staffing model primarily uses parent-country nationals to staff higher-level foreign positions.

Foreign Subsidiary

A company that is owned or controlled by another company, known as the parent company, and operates in a country different from where the parent company is headquartered.