What is the opportunity cost associated

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Your highly successful software company is considering adding a new software title to your list. If you add the new product, it will use the full capacity of your disk duplicating machines that you had planned on using for your flagship project, "Battlin' Bobby." You had previously planned on using the unused capacity to start selling "BB" on the west coast in two years. Eventually, you would have had to purchase additional duplicating machines 10 years from today, but since your new product will use up the extra capacity, this will require moving this purchase up 2 years from today. If the new machines will cost $100,000 and will be depreciated straight-line over a five-year period to a zero salvage value, your marginal tax rate is 32 percent, and your cost of capital is 12 percent,

Question 1: what is the opportunity cost associated with using the unused capacity for the new product?

Reference no: EM132465553

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