In a decision to drop a segment, the opportunity cost of the space occupied by the segment would be the profit that could be derived from the best alternative use of the space.

Question

Quizplus · Accepted Answer

This statement is correct. Opportunity cost refers to the benefit that is foregone by choosing one option over another. In this case, if a company decides to drop a segment and free up space, the opportunity cost would be the profit that could have been earned if that space was used for the best alternative purpose. Therefore, the statement is true.

In a Decision to Drop a Segment, the Opportunity Cost