The maximum corporation is looking at two major projects either of which, if successful, could put Maxi-mum at the top of the management consulting industry section. The first project is a $14,000,000 contract to help a fortune 100 company change its corporate culture. This project would involve moving the operations function to another city and would take 3 years of intensive training and consultation. The second project is valued at $15,000,000 and will involve helping management to reshape the corporate image of a former industry leader that has undergone a decline in market share and customer satisfaction. This project will also involve 3 years of intensive consultation efforts. Maxi-mum cannot do both projects because either project will require that Maxi-mum invest 80% or more of its resources into completing successfully. The CFO has heard about opportunity cost but is not sure what it really means.

(A). What has the opportunity cost?

(B). Explain what is meant by trade-offs.

(C). What is the production possibility curve, and can it be used in a business you researched on the Internet? Explain.

Answer rating: 100% (QA)

A Opportunity cost is the next best alternative It is the costprofit foregone when another option is ... View the full answer