An Insurance Office Owns a Large Building

question 96

Multiple Choice

An insurance office owns a large building. The sixth floor of this building currently houses its entire Human Resources Department. After carrying out a survey to see whether the sixth floor could be rented and for what price, the company must decide whether to split the Human Resources Department between currently unoccupied spaces on several floors and rent out the entire sixth floor or to leave things as they currently are. Which of the following should NOT be considered when deciding whether to rent out the sixth floor?

• A)the cost of the research into the feasibility of renting the sixth floor
• B)the cost of refurbishing the new space to be occupied by the Human Resources Department
• C)the amount obtained by renting the sixth floor
• D)cost involved with a loss of efficiency resulting from the Human Resources Department being split between several spaces

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Definitions:

U-shaped

Describes a situation or pattern resembling the shape of the letter "U," often used to describe certain types of economic recoveries or performance graphs.

Market Interest Rate

The prevailing rate at which borrowers can obtain loans and lenders can offer funds in the financial market.

Opportunity Cost

The cost of foregone alternatives, representing the benefits an individual, investor, or business misses out on when choosing one alternative over another.

Investment Project

A project involving the allocation of resources, such as time and money, with the expectation of generating future profits or benefits.