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You are considering adding a wood shop to your home. You enjoy working and could make items for sale. In considering this addition, you look only at the extra cost of the shop and the potential benefits of having the shop. This is an example of:________.
a) opportunity cost decision making.
b) sensitivity analysis.
c) marginal analysis.
d) reasonable assumptions.

Respuesta :

Answer: (A) Opportunity cost decision making

Explanation:

 The opportunity cost is one of the type of business decision making process and it providing various types of benefits to the investors and the individual people in the business.

It is one of the type of hypothetical cost that are sustain by selecting various types of alternatives choices.The opportunity cost helps in making different types of decisions for evaluating the corporate projects in an organization.  

 According to the given question, when we are looking various types extra cost in the shop and also the potential benefits then it is one of the example of opportunity cost decision making.

  Therefore, Option (A) is correct answer.  

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