What is the opportunity cost of adding petite sizes

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Reference no: EM13265478

Great Fit, Inc., is a company that makes clothing. The company has a product line that produces women's tops of regular sizes. The same machine could be used to produce petite sizes as well. However, the remaining life of the machines will be reduced from 5 years to 3 years if the petite size production is added. The cost of identical machines with a life of 9 years is $1.93 million. Assume the opportunity cost of capital is 8 percent. What is the opportunity cost of adding petite sizes?

Reference no: EM13265478

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