10.7 Opportunity cost is the contribution to income that is forgone (rejected) by not using a limited resource in its next-best alternative use. 10.8 Cost written off as depreciation is irrelevant when it pertains to a past cost. But the purchase cost of new equipment to be acquired in the future that will then be written off as depreciation is often relevant. 10.9 No. Managers tend to favour the alternative that makes their performance look best, so they focus on the measures used in the performance–evaluation model. If the performance–evaluation model does not emphasise maximising operating income or minimising costs, managers are not likely to choose the alternative that maximises operating income or minimises costs. 10.10 The text outlines two methods of determining the optimal solution to an LP problem
