the government passed a major corporate tax cut, which allowed alberts bookstore to invest the savings in…

the government passed a major corporate tax cut, which allowed alberts bookstore to invest the savings in taxes back into its business. the board voted to give all salary employees a 10% raise. use the chart to explain the opportunity cost of the boards decision.\na 10% raise to all salary employees\nb construction of new macon, ga. location\nc increase inventory warehouse in braselton, ga.\nd renovation and expansion of mall of georgia store\ne devise a better alternative with which to use saved money

the government passed a major corporate tax cut, which allowed alberts bookstore to invest the savings in taxes back into its business. the board voted to give all salary employees a 10% raise. use the chart to explain the opportunity cost of the boards decision.\na 10% raise to all salary employees\nb construction of new macon, ga. location\nc increase inventory warehouse in braselton, ga.\nd renovation and expansion of mall of georgia store\ne devise a better alternative with which to use saved money

Answer

Answer:

B. Construction of new Macon, Ga. location, C. Increase Inventory Warehouse in Braselton, Ga, D. Renovation and Expansion of Mall of Georgia Store

Brief Explanations:

Opportunity cost is defined as the value or benefit of the next best alternative that must be forgone in order to pursue a certain action. The Board chose to give employees a 10% raise (Option A) using the savings from a corporate tax cut. The opportunity cost of this decision is the value or benefit that could have been obtained from the best alternative use of that money. Options B, C, and D represent alternative investments (constructing a new location, increasing warehouse capacity, renovating/expanding a store) that the company could have pursued instead. Therefore, the benefits lost by not choosing the best among these alternatives constitute the opportunity cost of giving the salary raise.