P10-4 ( similar to )
Opportunity cost . Richardses ' Tree Farm , Inc . has branched into gardening over the years and is now considering adding patio furniture to its product lineup . Currently , the area where the patio furniture is to be displayed is a vacant slab of concrete attached to the indoor shop . The company originally paid $ 8000 to put in the slab of concrete three years ago . It would now cost $ 13000 to put in the same slab of concrete . Should the company consider the concrete slab when expanding its outdoor garden shop to include patio furniture ? If yes , which value should it use ? Should the company consider the concrete slab when expanding its outdoor garden shop to include patio furniture ? If yes , which value should it use ?
( Select the best response .) A .
No . The slab is a sunk cost unless there is another use for the slab that could provide cash flow to Richardses ' Tree Farm . The additional cash flow that the slab could provide is the opportunity cost , not the current
B . Yes , use $ 13 comma 000 as the cost . C . Yes , use