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Two years ago Red Bricks Ltd. bought a parcel of land for $200,000 and spent...

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Finance

Two years ago Red Bricks Ltd. bought a parcel of land for $200,000 and spent $40,000 laying a foundation for a new factory. Work was stopped because of a recession. Now that the economy has improved, Red Bricks is considering starting the expansion again. The latest numbers suggest it can complete construction using 1 million of its own bricks that cost $0.50 to make but could have been sold for $0.75 each.

A) Opportunity cost and sunk cost

B) Sunk cost and opportunity cost

C) None of these

D) Capital investment and working capital

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