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Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
Edition 2ISBN: 978-1111824402Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
Edition 2ISBN: 978-1111824402 Exercise 47
(2010 CPA Exam) Carter Co. paid $1,000,000 for land three years ago. Carter estimates it can sell the land for $1,200,000, net of selling costs. If the land is not sold, Carter plans to develop the land at a cost of $1,500,000. Carter estimates net cash flow from the development in the first year of operations would be $500,000. What is Carter's opportunity cost of the development?
A) $1,500,000
B) $1,200,000
C) $1,000,000
D) $500,000
A) $1,500,000
B) $1,200,000
C) $1,000,000
D) $500,000
Explanation
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Verified
Opportunity cost is the profit or benefi...
Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
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