Problem:
Speck Inc. purchased a tract of land 3 years ago at a cost of $280,000. Speck is now considering building a new manufacturing plant on the land. A recent appraisal put the land's value at $435,000, for which the company is assumed to be able to sell it if necessary.
Required:
Question: What amount relative to the land (ignoring any tax implications) should be included in the capital budgeting analysis on whether to accept or reject the project?
A. Zero
B. $280,000
C. $435,000
D. $280,000 plus interest for three years
Note: Please answer in proper manner and show all computations