Problem
Bank of E (BoE) is planning to build a new branch on land it already owns. The land was purchased several years ago for $250,000. Recently, BoE was offered $ 350,000 for the land. BoE estimates that if they build the branch, it will create NPV = $400,000. BoE did not consider the valued in this NPV calculations. Given this information, what is the opportunity cost to BoE of building the proposed branch?