In making the decision to invest in the model 260 machine, the opportunity cost was:
A)$418,000
B)$456,000
C)$474,000
D)$496,000

Question

Quizplus · Accepted Answer

The opportunity cost of investing in the model 260 machine is the potential revenue that could have been earned by investing in the next best alternative. The question doesn't provide information about the potential revenue from the alternative investments, but among the given options, the highest opportunity cost is $496,000 (option D), which means that investing in the model 260 machine would result in giving up potential revenues of up to $496,000. Therefore, the best choice is not to invest in the model 260 machine and consider other alternatives that have a lower opportunity cost.

In Making the Decision to Invest in the Model 260