You run an apparel manufacturing business. The business runs smooth and is on expansion course. You are now confronted with the decision to either invest 12 m in a factory expansion (including all machinery and infrastructure) to roll out a new fashion line product or to engage an Asian manufacturing partner that promises to produce and ship your designs timely and with the demanded quality for a 3m$ capital expenditure plus manufacturing costs plus a 15% profit margin. After several weeks of analysis and discussion with your CFO and VP of Sales you decide to go for the Asian connection. Please think and explain detailed and carefully what your opportunity costs for each of the below scenarios are.

scenario a) your business has 12m cash balance when making the decision.

scenario b) your business has 2m cash balance when making the decision.