Vas & Co. Ltd is engaged in trading business and uses its own building for the purpose. The data obtained from the records of the company show the estimates as follows:

Cost of goods sold per annum

70,000

Other operating expenses per annum

40,000

Building ownership costs p.a.

(Rent and rates and maintenance and

15,000

insurance charges for building are not

included above

Sales per annum

2,50,000

Another firm has offered to take the building on lease for Rs. 7,500 per month. In this case, Vas & Co. Ltd would have Rs. 7,500 per month. In this case, Vas & Co. Ltd would have to discontinue its operations and handover the building to the lessee.

You are required to take a decision using opportunity-costing approach.