ABC Corp. recommendation to use or sell their facilities.
Not what you're looking for?
ABC Corp. owns a piece of land and building a few miles from its headquarters. The land originally cost ABC $500,000 to purchase. ABC is considering using the facility for a new training program. It could also rent a building about the same distance from its headquarters for $20,000 a year. A developer has offered ABC $2.5 million for its property. What factors should ABC consider when deciding whether or not to use its own facility or to sell it and rent the other building? What would you recommend?
Purchase this Solution
Solution Summary
The solution analyzes if ABC Corp. should sell their facility or if they should use its own facility. Calculations and explanations are provided to support the decision.
Solution Preview
CalcThere are a few factors to consider.
The land cost $500,000 to purchase, which is now a sunk cost. If they use the land and building for a new training program, it will be producing something for the company, which will add to the company's profitability.
If they rent the other building the same distance away for $20,000 per year, the $500,000 continues to be a sunk cost that can't be recovered. They ...
Purchase this Solution
Free BrainMass Quizzes
Understanding Management
This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.
Marketing Management Philosophies Quiz
A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.
Writing Business Plans
This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.
Transformational Leadership
This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.
Change and Resistance within Organizations
This quiz intended to help students understand change and resistance in organizations