In a decision-making scenario for a business considering two investment options, how can a decision matrix help quantify opportunity costs and improve business strategy?

A decision matrix is a useful tool for businesses when they need to compare different investment options. It helps by listing the possible choices and the criteria that are important for making a decision, like cost, potential profit, and risk level. Each option is scored based on these criteria, allowing businesses to see which choice offers the best benefits and which could lead to missed opportunities, known as opportunity costs. For example, if a company is deciding between investing in new machinery or marketing, the matrix can show how much profit each option could bring and what they might lose by not choosing the other. This clear comparison helps businesses make informed decisions that align with their overall strategy.