The university recently inherited a large mansion from a wealthy alumnus. The un
ID: 1248425 • Letter: T
Question
The university recently inherited a large mansion from a wealthy alumnus. The university plans to use the mansion for faculty parties and to house distinguished guests. The cost of the mansion to the university is: (one answer)a. zero, because it was a gift.
B. the cost of upkeep (including maintenance, utilities, and so forth).
C. the amount the university would receive if it rented or sold the mansion.
D. the cost of upkeep (including maintenance, utilities, and so forth) and the amount the university would receive if it rented or sold the mansion.
Explanation / Answer
This is dealing with opportunity cost and Marginal cost- What does the university have to give up to get something? and What is the cost involved in ownership? I would answer D as it is actually the cost of upkeep - profits Good luck
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