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Yilandwe Opportunity costs

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Yilandwe Opportunity costs

  • This topic has 1 reply, 2 voices, and was last updated 7 years ago by AvatarJohn Moffat.
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  • November 8, 2018 at 3:41 am #484149
    Avatarrichardscully
    Participant
    • Topics: 197
    • Replies: 145
    • ☆☆☆

    Dear Sir

    I notice that the answer sheet on Yilandwe does not include the opportunity cost on the NPV calculation. Furthermore, is that opportunity cost discounted? And further, I read the opportunity costs as 000, so millions, but i see it was just thousands, or was I wrong?

    November 8, 2018 at 8:14 am #484162
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54839
    • ☆☆☆☆☆

    The only opportunity cost is the los contribution, and the examiner mentions this at the end of his answer. It would be discounted (and you would not be wrong if you had brought it in) but as the examiner states, the amount is so low as to not affect the decision. He also deals with your last point in the very last line of his answer.

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