Solution-What is the opportunity cost in making decision to

What is the opportunity cost in making decision to invest

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Reference no: EM132999220

A company is deciding between purchasing two machines. Machine A costs $524,000 and Machine B costs $438,000. The purchase is to replace a machine that was purchased 7 years ago for $499,000. The old machine was used to make product XYZ until it broke down last week. Unfortunately, the old machine cannot be repaired.

Management has decided to buy Machine B. It has less capacity than Machine A but enough to continue making product XYZ.
Management also considered, but rejected, the alternative of simply dropping product XYZ. If that were done, instead of investing $438,000 in the new machine, the money could be invested in a project that would return a total of $488,000.

Problem 1: In making the decision to invest in Machine B, the opportunity cost is

Reference no: EM132999220

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What is the opportunity cost in making decision to invest : In making the decision to invest in Machine B, the opportunity cost is? A company is deciding between purchasing two machines. Machine A costs $524,000.

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What is the opportunity cost in making decision to invest

Reference no: EM132999220

Reference no: EM132999220

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