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You are considering adding a new software title to those published by your highly successful software company. If you add the new product, it will
You are considering adding a new software title to those published by your highly successful software company. If you add the new product, it will use capacity on your disk duplicating machines that you had planned on using for your flagship product, Battlin Bobby. You had planned on using the unused capacity to start selling BB on the West coast in two years. You would eventually have had to purchase additional duplicating machines years from today, but using the capacity for your new product will require moving this purchase up to years from today. If the new machines will cost $ and can be expensed under Section your marginal tax rate is percent, and your cost of capital is percent, what is the opportunity cost associated with using the unused capacity for the new product?
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