The Ascott Company has in its inventory 3,000 damaged radios that cost $45,000. The radios can be sold in their present condition for $30,000, or repaired at a cost of $41,000 and sold for $75,000. What is the opportunity cost of selling the radios in their present condition?

Question

Quizplus · Accepted Answer

The opportunity cost of selling the radios in their present condition is the net benefit forgone from not repairing and selling them. If repaired and sold, the radios would net $75,000 - $41,000 = $34,000 more than selling them as is for $30,000.

The Ascott Company Has in Its Inventory 3,000 Damaged Radios