Bob Waldorf is in charge of buying property to be used as branch office sites for the Kenner National Bank (KNB). Mr. Waldorf paid $120,000 in July 2017 for a lot (Site A) located in a growing section of the city. Early in 2019, Mr. W has a chance to purchase a better lot (Site B) for $80,000. The traffic count for Site B is twice the traffic count for Site A and has a much bigger parking lot.

Mr Waldorf believes the current market price for Site A is now about $100,000. He thinks it would be in the bank's best interest to sell Site A and purchase Site B but he doesn't want to look bad in the eyes of his boss, Fred Mullet (even though Mr. M has made plenty of bad decisions himself). In any case, Mr. W must get Mr. Mullet's permission to sell Site A and then purchase Site B.

Required:

1. Determine the amount of the loss that would be recognized if the Site A were to be sold for $115,000. Show all calculations.

2. Identify the type of cost (sunk, opportunity) that is represented by the original $120,000 paid for Site A. Is this cost relevant to decision-making? Why or why not? (2-3 sentences)

3. Identify the type of cost (sunk, opportunity) that is represented by the $80,000 cost of Site B. Is this cost relevant to decision-making? Why or why not? (2-3 sentences)

4. Name two other important qualitative or quantitative facts that Mr. Waldorf would like to know about one site or the other before bringing the proposal to Mr. Mullet? (Use your imagination; DO NOT use information already provided in the case. 3-4 sentences