A business analyst is helping management determine which solution they should choose. As it happens that the organization can only choose one of the two solutions due to time and resource restrictions. Solution A worths $456,000 to the organization while solution B worths $565,000 to the organization. While solution A costs less, it is less risky and takes less time to complete so management elects to seize Solution A.
What is the opportunity cost?
Opportunity cost is the value of the best alternative that is not selected. In this case, Solution B is worth $565,000, and since it is not chosen, the opportunity cost for selecting Solution A is $565,000.
Given answer is correct, this is in the context of business analysis, not economics. BABAK guide v3 page 159 - "The opportunity cost of any design option is equal to the value of the best alternative not selected"
Correct Answer: C Opportunity Cost Formula and Calculation Opportunity Cost=FO−CO where: FO=Return on best foregone option CO=Return on chosen option 565,000 – 456,000 = 109,000
Incorrect, A is correct according to Babok
it is A.
It's A according to BABOK.You're using Economics process to calculate 🙂.
sorry the right answer is a
Opportunity cost refers to the BENIFITS that could have been achieved by selecting an alternative change strategy. so the answer is C
dddddddddddddddddd