What should primarily govern the decision to pursue a new opportunity?

The decision to pursue a new opportunity should primarily be governed by finances and opportunity cost because these factors are crucial in determining the feasibility and potential profitability of the venture. Evaluating the financial implications helps in understanding the resources required, the potential return on investment, and the long-term sustainability of pursuing this opportunity. Opportunity cost involves analyzing what is being sacrificed by choosing one option over another, allowing decision-makers to assess whether the benefits of the new opportunity outweigh the costs and potential gains from other initiatives.

While customer feedback, managerial preference, and market competition can influence the decision, they should be considered as secondary factors that support the financial analysis. For example, customer feedback can identify market needs but should ultimately be weighed against the expected financial returns. Similarly, managerial preference may align with certain opportunities, but if they do not provide a solid financial justification, they may not be the best choice. Market competition can inform the attractiveness of an opportunity, yet without a solid financial foundation, it would not be prudent to base the decision solely on competitive factors. Thus, a thorough financial analysis is essential for informed decision-making regarding new opportunities.