If a Firm Has the Option of Leasing Some Factory

question 15

Multiple Choice

If a firm has the option of leasing some factory space to another firm or utilizing it for another product line, then if the firm chose the product line how should it handle the lost lease payments on the factory space?

• A) Ignore it.
• B) Include it as an opportunity cost.
• C) Include half of it as additional revenue for the project.
• D) None of the above.