Maxi-mum corporation is looking at two major projects either of which, if succes
ID: 1193855 • Letter: M
Question
Maxi-mum corporation is looking at two major projects either of which, if successful. could put maxi-mum at the top of management consulting industry section. The project is $14,000,000 contract to help a fortune 100 company its corporate culture.This project would involve moving the operations function to another city and would take 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 under gone a decline market share and customer satisfaction.This project will also involve 3 years of intensive consultation efforts. Maxi-mum can not do both projects because either project will require that Maxi-mum invest 80% or more of its resources into completing successfully.The CFO have heard of opportunity cost but he's not sure what it really means,
What is opportunity cost?
Explain what its meant by trade-offs.
What is production possibility curve, can it be used in a business you researched on the internet? Explain
Explanation / Answer
The cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action.
In economics, the term trade-off is often expressed as an opportunity cost, which is the most preferred possible alternative. A trade-off involves a sacrifice that must be made to get a certain product or experience. A person gives up the opportunity to buy 'good B,' because they want to buy 'good A' instead. For a person going to a baseball game, their economic trade-off is the money and time spent at the ballpark, as compared to the alternative of watching the game at home and saving their money, plus the time spent driving to the ball game.
A graphical representation of the alternative combinations of the amounts of two goods or services that an economy can produce by transferring resources from one good or service to the other. This curve helps in determining what quantity of a nonessential good or a service an economy can afford to produce without jeopardizing the required production of an essential good or service. Also called transformation curve