Your Firm Is Considering Building a New Office Complex

question 113

Multiple Choice

Your firm is considering building a new office complex. Your firm already owns land suitable for the new complex. The current book value of the land is $130,000; however, a commercial real estate agent has informed you that an outside buyer is interested in purchasing this land would be willing to pay $700,000 for it. When calculating the net present value (NPV) of your new office complex, ignoring taxes, the appropriate incremental cash flow for the use of this land is ________.

• A) $700,000
• B) $0
• C) $130,000
• D) $830,000

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Definitions:

Attention-Seeking

Behavior aimed at attracting notice and acknowledgment from others, often due to a desire for validation or affection.

Ludus

in the context of love, refers to a playful, uncommitted love style that values fun and freedom over deep emotional attachment.

Casual

Describing something that is relaxed and unconcerned, or an event or clothing that is informal.

Pragma

A term from Greek that refers to a practical, utilitarian kind of love within relationships.