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What is the opportunity cost of adding petite sizes

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Question - Sports Gear Ltd 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 4 more years to 2 more years if the petite size production is added. The cost of identical machines with a life of 8 years is $1 300 000. Assume the opportunity cost of capital is 15 per cent. What is the opportunity cost of adding petite sizes?

Reference no: EM132943796

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