Relevant Information and Opportunity Costs (Case study: Megastar Software) Part A-Opportunity & Relevant costs Megastar Software recently developed new spreadsheet software, Ad-Soon, which it intends to market by mail through ads in computer magazines. Just prior to introducing Ad-Soon, Megastar received an unexpected offer from Vision Computer Company to buy all rights to the software for 4 million cash. Instructions 1- Is the 4 million offer "relevant" financial information? Why? (6 marks) Yes, the E4 million offer is a relevant financial information because its gives an idea of information price to be charged of AS-Soon if marketed by mail through ads in computer gazines. Now, 4 million offer is the minimum price to be charged. Without ads, they got the opportunity to sell away the new product. 2- Describe Megastar's opportunity cost if it: a- accepts Vision Company's offer and (6 marks) Opportunity cost would be none. b- Turns down the offer and markets Ad-Soon itself. (6 marks) Opportunity Cost would be visions company offer of 4 million c-Would these opportunity costs be recorded in Megastar's accounting records? (6 marks) No, these opportunity cost would not be recorded in Megastars Accounting record 3- Briefly describe the extent to which the pound sterling amounts of the two opportunity costs described in part 2 are known to management at the time the decision is made to accept or reject Vision Company's offer.(6 marks) Only relevant cost i.e cost of developing the software is known while accepting or rejecting the visions company software 4- Might there be any other opportunity costs to consider at the time of the making this decision? If so, explain briefly. (18 marks) Relevant cost of software i.e of developing a software should also be considered while making the decision because the relevant cost is the minimum price to be charged for the software. plain why opportunity costs represent a common source of error in making cost analyses. marks) 5- Please Answer opuestion Nunbber * Checkc my auswes anel pro uide me with oetter answers and tell me which One is not Covrect e opinion aind whuts the Correst answer in your