Question

    A firm uses a vacant plot to construct a new office. The

    plot could otherwise be leased at ₹10 lakhs annually. What is the opportunity cost of using the plot for construction?
    A Construction cost Correct Answer Incorrect Answer
    B Market value of land Correct Answer Incorrect Answer
    C Tax saving on depreciation Correct Answer Incorrect Answer
    D ₹10 lakhs per annum of foregone rental income Correct Answer Incorrect Answer

    Solution

    The correct answer is D

    Practice Next
    ask-question