Problem:
Diamond Inc. has estimated that a new building will cost $2,500,000 to construct. Land was purchased a year ago for $500,000 and could be sold today for $550,000. An environmental impact study required by the state was performed at a cost of $48,000.
Required:
Question: For capital budgeting purposes, what is the relevant cost of the new building?
- $2,500,000
- $3,048,000
- $3,050,000
- $3,098,000
Note: Please provide full description.