When a company is outsourcing a process, resources are freed up so they can be put to another use.The alternative use is considered to be
A)an opportunity cost.
B)a sunk cost.
C)an outsource windfall.
D)a fixed cost.

Question

Quizplus · Accepted Answer

Opportunity cost refers to the benefits forgone by choosing one alternative over another. In this case, the resources freed up through outsourcing can be put to another use, which represents an opportunity cost. Sunk cost refers to costs that have already been incurred and cannot be recovered. Outsource windfall and fixed cost do not accurately describe the situation.

When a Company Is Outsourcing a Process, Resources Are Freed