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Exam CBAP topic 1 question 142 discussion

Actual exam question from IIBA's CBAP
Question #: 142
Topic #: 1
[All CBAP Questions]

A business analyst is helping management determine which solution they should choose. As it happens that the organization can only choose one of the two solutions due to time and resource restrictions. Solution A worths $456,000 to the organization while solution B worths $565,000 to the organization. While solution A costs less, it is less risky and takes less time to complete so management elects to seize Solution A.
What is the opportunity cost?

  • A. $565,000
  • B. There is not enough information to know how much the solution will cost the organization.
  • C. $109,000
  • D. $456,000
Show Suggested Answer Hide Answer
Suggested Answer: A 🗳️
by rhsdeal at May 1, 2021, 12:26 p.m.

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Jeffdu
Highly Voted 3 years, 7 months ago
Given answer is correct, this is in the context of business analysis, not economics. BABAK guide v3 page 159 - "The opportunity cost of any design option is equal to the value of the best alternative not selected"
upvoted 16 times
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aaa111aaa
Most Recent 3 weeks, 6 days ago
Selected Answer: A
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upvoted 1 times
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Shreejith
2 years, 5 months ago
Selected Answer: C
Opportunity cost refers to the BENIFITS that could have been achieved by selecting an alternative change strategy. so the answer is C
upvoted 1 times
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saeedddddd
3 years, 1 month ago
sorry the right answer is a
upvoted 2 times
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saeedddddd
3 years, 1 month ago
dddddddddddddddddd
upvoted 1 times
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rhsdeal
3 years, 8 months ago
Correct Answer: C Opportunity Cost Formula and Calculation Opportunity Cost=FO−CO where: FO=Return on best foregone option CO=Return on chosen option 565,000 – 456,000 = 109,000
upvoted 3 times
NickMane
3 years, 4 months ago
Incorrect, A is correct according to Babok
upvoted 3 times
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Squib
1 year, 11 months ago
it is A.
upvoted 1 times
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Bunlizlaw
1 year, 8 months ago
It's A according to BABOK.You're using Economics process to calculate 🙂.
upvoted 1 times
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