Your organization is trying to determine which one of two opportunities they will pursue. The Project A is worth $235,987 and Project B is worth $567,000 but carries significant risk. The organization elects to purse Project B and not Project A.
What is the opportunity cost in this scenario?
Opportunity cost is defined as the value of the next best alternative that is forgone when a decision is made. In this scenario, the organization chose to pursue Project B and not Project A. Therefore, the opportunity cost is the value of Project A, which is $235,987, as this is the next best alternative that was not selected.
After careful review: "Opportunity cost is the value of the next-best alternative when a decision is made; it's what is given up" ...so the value of the product A.. C is correct
Formula for Calculating Opportunity Cost Opportunity Cost=FO−CO where: FO=Return on best forgone option CO=Return on chosen option in this case i think the opportunity cost will be negative -331,013, and i think minus sign is ommited?
The opportunity cost is the value of the opportunity that the organization has given up. Therefore, the opportunity cost is the worth of Project A $235,987. answer is C. $235,987.
pg.159: Opportunity costs are alternative results that might have been achieved if the resources, time, and funds devoted to one design option had been allocated to another design option. The opportunity cost of any design option is equal to the value of the best alternative not selected.
The value of the best alternative not chosen
The opportunity cost of any design option is equal to the value of the best alternative not selected (BABOK V3 pg 159) - C. $235,987
Opportunity Cost=FO−CO where: FO=Return on best forgone option CO=Return on chosen option
The opportunity costis the value of the opportunity that the organization has given up. Therefore, the opportunity cost is the worth of Project A $235,987. answer is C. $235,987.
I choose A Though not yet seen in BABOK .... but formula for calculating Opportunity cost is Opportunity Cost=FO−CO where: FO=Return on best forgone option CO=Return on chosen option in plain English Opportunity cost is the cost of the alternative forgone
Opportunity cost = Cost of alternative outcome - cost of chosen outcome
p 1679: Business analysts also consider opportunity cost when estimating the expected cost of a change. Opportunity costs are alternative results that might have been achieved if the resources, time, and funds devoted to one design option had been allocated to another design option. The opportunity cost of
is this correct, isn't it A correctt
C is the correct answer. Opportunity cost is the alternative forgone
opportunity cost is the cost you pay or revenue you don't get because of choosing one option over other