Question

The company uses a custom-made software program to manage its inventory. The company paid a consulting firm $32,000 to develop the custom software. The annual opportunity cost for the resource is $_____.

Answer 1

Answer: $0

Explanation:

The program is said to be custom-made which means that the program is specifically for this company and so cannot be used by another.

This will put the opportunity cost at $0 because the company cannot use the money paid to develop something else as there are no alternatives to a custom made software.