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Exam CBAP topic 1 question 54 discussion

Actual exam question from IIBA's CBAP
Question #: 54
Topic #: 1
[All CBAP Questions]

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?

  • 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
Show Suggested Answer Hide Answer
Suggested Answer: C 🗳️
by NickMane at June 29, 2021, 12:34 p.m.

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Centinno_98
9 months, 1 week ago
If company had chosen project A, then the opportunity cost will be the extra 300+ thousand they forgo to save themselves from the significant risks associated with project B. Now, since project B was chosen, the opportunity cost now becomes a sure 235987 dollars that would have been made. So the right option is C.
upvoted 1 times
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Typhat
1 year, 6 months ago
Selected Answer: C
The value of the best alternative not chosen
upvoted 1 times
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Georgian1994
1 year, 6 months ago
Selected Answer: C
The opportunity cost of any design option is equal to the value of the best alternative not selected (BABOK V3 pg 159) - C. $235,987
upvoted 2 times
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Moathov
1 year, 8 months ago
Selected Answer: A
Opportunity Cost=FO−CO where: FO=Return on best forgone option CO=Return on chosen option ​
upvoted 1 times
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giorgib22
1 year, 8 months ago
Formula for Calculating Opportunity Cost Opportunity Cost=FO−CO where: FO=Return on best forgone option CO=Return on chosen option in this case i think the opportunity cost will be negative -331,013, and i think minus sign is ommited?
upvoted 2 times
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moririn
1 year, 9 months ago
Selected Answer: C
The opportunity cost is the value of the opportunity that the organization has given up. Therefore, the opportunity cost is the worth of Project A $235,987. answer is C. $235,987.
upvoted 2 times
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moririn
1 year, 9 months ago
The opportunity costis the value of the opportunity that the organization has given up. Therefore, the opportunity cost is the worth of Project A $235,987. answer is C. $235,987.
upvoted 1 times
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Tyad1
1 year, 10 months ago
Selected Answer: A
I choose A Though not yet seen in BABOK .... but formula for calculating Opportunity cost is Opportunity Cost=FO−CO where: FO=Return on best forgone option CO=Return on chosen option ​in plain English Opportunity cost is the cost of the alternative forgone
upvoted 1 times
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hilalets
1 year, 11 months ago
Selected Answer: A
Opportunity cost = Cost of alternative outcome - cost of chosen outcome
upvoted 1 times
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Dillon91
3 years, 3 months ago
pg.159: Opportunity costs are alternative results that might have been achieved if the resources, time, and funds devoted to one design option had been allocated to another design option. The opportunity cost of any design option is equal to the value of the best alternative not selected.
upvoted 2 times
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Dillon91
3 years, 7 months ago
p 1679: Business analysts also consider opportunity cost when estimating the expected cost of a change. Opportunity costs are alternative results that might have been achieved if the resources, time, and funds devoted to one design option had been allocated to another design option. The opportunity cost of
upvoted 1 times
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NickMane
3 years, 11 months ago
After careful review: "Opportunity cost is the value of the next-best alternative when a decision is made; it's what is given up" ...so the value of the product A.. C is correct
upvoted 4 times
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NickMane
4 years, 1 month ago
is this correct, isn't it A correctt
upvoted 1 times
binu801
4 years ago
opportunity cost is the cost you pay or revenue you don't get because of choosing one option over other
upvoted 1 times
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RoseBeat
4 years, 1 month ago
C is the correct answer. Opportunity cost is the alternative forgone
upvoted 5 times
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C (25%)
B (20%)
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