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FBA15 · Question #94

FBA15 Question #94: Real Exam Question with Answer & Explanation

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Question

An IT department needs to upgrade its hardware to run the new version of an established operating system. The cost of this required upgrade is $2 million. As an alternative, the IT director has suggested that the company should change to a completely different operating system. Although this will cost $6 million, the change will bring many other benefits, including cheaper maintenance costs and increased security. What is the avoided cost in his proposal?

Options

  • A$2 million.
  • B$4 million.
  • C$6 million.
  • D$8 million.

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