Vera Enterprises has in its inventory 1,000 damaged handbags that cost $20,000.The handbags can be sold in their present condition for $12,000,or repaired at a cost of $13,000 and sold for $31,000.What is the opportunity cost of selling the handbags in their present condition?

Question

Quizplus · Accepted Answer

The opportunity cost is the potential benefit lost by choosing one alternative over another. If the handbags are repaired and sold, the net gain would be $31,000 - $13,000 = $18,000. Therefore, the opportunity cost of selling them in their present condition is $18,000.

Vera Enterprises Has in Its Inventory 1,000 Damaged Handbags That