Post Utme Elizade University 2020 Commerce Question 12

Practice objective / multiple choice question 12 from the 2020 Post Utme Elizade University Commerce examination.

Post Utme Elizade University 2020 Commerce Objective / Multiple Choice
Question 12 POST_UTME_ELIZADE_UNIVERSITY • 2020 • COMMERCE • objective

A company is considering two different production processes for a new product. Process A requires an initial investment of ₦10 million and produces 100 units per month, while Process B requires an initial investment of ₦5 million and produces 50 units per month. If the company expects to sell each unit for ₦20,000, which process should it choose?

Answer Options

A. Process A, because it produces more units per month.
B. Process B, because it requires a lower initial investment.
C. Process A, because it has a higher profit margin.
Correct Answer D. Process B, because it has a lower opportunity cost.
Correct Answer
D
Correct Option:
Process B, because it has a lower opportunity cost.

About This Question

This is Post Utme Elizade University 2020 Commerce Question 12. It is one of the objective questions from the 2020 Post Utme Elizade University Commerce examination.

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