Concept of opportunity cost in capital budgeting decision

Reference no: EM1368484

US Airways owns a piece of land near the Pittsburgh International Airport.The land originally cost US Airways 375,000$.The Airline is considering building a new training center on this land. US Airways has determined that the proposal to build new facility is acceptable if the original cost of the land is used in the analysis,but the proposal does not meet the airlines project acceptance criteria if the land cost is above 850,000$.A developer has recently offered US Airways 2.5 million for the land. Should US Airways build the training facility at this locations?(Ignore taxes.)

Reference no: EM1368484

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