Should improvements made to the land be included

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Question: An independent petroleum refiner decides to build a new refinery on some land it bought 5 years ago for $5 million. The firm can sell the land today for $10 million. Should the firm include the cost of the land in estimating the cash flows of the project? If so, what is the appropriate cost - $5 or $10 million? Should improvements made to the land be included?

Reference no: EM131477508

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