Answer to Question #135178 in Microeconomics for Aliah Mie A. Medilo

Question

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 determined that the proposal to
build the new facility is acceptable if the original cost of the land is used in theanalysis, but the proposal does not meet the airline’s project acceptance criteria if
the land cost is above $850,000. A developer recently offered US Airways $2.5
million for the land. Should US Airways build the training facility at this
location?

Answer 1

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