The opportunity cost amounts to $532,000. This represents the cost of the most preferable alternative that was not selected. In this case, rejecting the investment project meant foregoing the potential return of $532,000.
Answer and Explanation:
Here is the breakdown:
1. For the contribution to Mother Nature
This corresponds to sales amounting to $2,750
2. Regarding Tlaloc's value-added
It equates to
= $7,750 - $2,750
= $5,000
3. For Bob’s value added
It corresponds to
= $20,000 - $7,750
= $12,250
This process applies equally to all three.