A proposed project will require the use of ten machines in a company.Each machine has five alternative uses.What is the simplest way to evaluate the desirability of the project?
A) incremental analysis
B) cost-volume-profit analysis
C) opportunity cost approach
D) scarce resource approach

Question

Quizplus · Accepted Answer

The opportunity cost approach is the simplest way to evaluate the desirability of the project in this scenario because it considers the value of the best alternative use of the machines that will be foregone if the project is undertaken. This approach directly addresses the trade-off involved in using the machines for the proposed project versus their next best alternative uses.

A Proposed Project Will Require the Use of Ten Machines