Certified Business Analysis Professional (CBAP) — Question 226

Your organization is trying to determine which one of two opportunities they will pursue. The Project A is worth $235,987 and Project B is worth $567,000 but carries significant risk. The organization elects to purse Project B and not Project A.
What is the opportunity cost in this scenario?

Answer options

• A. $331013
• B. There is not enough information to know as the risk for Project B has not been quantified.
• C. $235,987
• D. $567,000

Correct answer: C

Explanation

The opportunity cost is defined as the value of the next best alternative that is forgone when a decision is made. In this case, by choosing Project B, the organization gives up the value of Project A, which is $235,987. Other options either miscalculate the opportunity cost or suggest insufficient information, which is not the case.