Suppose IBM decides to build a new office building in Sao Paulo on some land it bought ten years ago.
--> IBM must include the cost of the land in calculating the value of undertaking the project.
--> This cost must be based on the current _______ value of the land, not the price it paid ten years ago.
General Rule: Project costs must include the true economic cost of any resource required for the project, regardless of whether the firm already owns the resource or it has to go out and acquire it.
