CBAP Business Analyst Exam Prep

Answer A : True - You must consider opportunity costs when evaluating a project. By selecting one project, you are almost always choosing to perform that project over another one. Opportunity cost is the value of the next best alternative to the project you are selecting.

Key Takeaway: A company has a finite amount of capital to invest, so any expenditure, including a project, has an opportunity cost. The opportunity cost is what could have been done with that capital were it not deployed to the project.