When the transactions costs involved in putting a project together exceed the difference in the value of land with the project completed and the value of the land without the project, the project should be undertaken.

Question

Quizplus · Accepted Answer

If the transaction costs exceed the difference in value between the completed project and the land without the project, it implies that the project would result in a net loss rather than a gain, making it financially unviable to undertake.

When the Transactions Costs Involved in Putting a Project Together