Kate's Store is considering three mutually exclusive options for the use of the new addition to her facility.Kate can either expand the women's clothing section,add a new footwear section,or expand into home linens.She estimates annual profits of either $120 000 from the clothing,$104 000 from the footwear,or $98 000 from the home linens section,should that section be chosen for the expansion.What is the opportunity cost of her most profitable option?

Question

Quizplus · Accepted Answer

The opportunity cost of the most profitable option (clothing section with $120,000 profit) is the profit from the next best alternative, which is the footwear section with $104,000 profit.

Kate's Store Is Considering Three Mutually Exclusive Options for the Use