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A business analyst is helping management determine which solution they should choose. As it happens that the organization can only choose one of the two solutions due to time and resource restrictions. Solution A worths $456,000 to the organization while solution B worths $565,000 to the organization. While solution A costs less, it is less risky and takes less time to complete so management elects to seize Solution A. What is the opportunity cost?
Correct Answer: C
Explanation The opportunity cost is the value of the best alternative forgone when choosing one option over another. In this case, the opportunity cost of choosing solution A is the value of solution B minus the value of solution A, which is $565,000 - $456,000 = $109,000. This means that by choosing solution A, the organization is giving up the potential benefit of $109,000 that could have been gained from solution B. References: CBAP Certification Study Guide v3.0, page 33; BABOK Guide v3, page 16.