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A parcel of corporate land was recently dedicated as the new plant site. What is the opportunity cost of land that should be considered, based on the following: original cost of $200,000, market value of $300,000, net book value of $200,000, a recent offer to purchase for $250,000.

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JeanaShupp

Answer: $300,000

Explanation:

  • Opportunity cost is the value of the best available to you .
  • An opportunity cost is mostly equal to the current market value.

Given, original cost of $200,000, market value of $300,000, net book value of $200,000, a recent offer to purchase for $250,000.

Highest value = market value =  $300,000

Hence, the opportunity cost of land that should be considered as $300,000.

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