Opportunity cost

opportunity cost
The next best benefit foregone. The opportunity lost. Often measured as the contribution margin given up by not doing an activity.

Opportunity Cost
Financial Dictionary - Investing - Opportunity Cost
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Opportunity Cost ...

Opportunity cost of capital
Expected return that is foregone by investing in a project rather than in
comparable financial securities.
opportunity cost of capital ...

Opportunity cost
Opportunity cost is a term used in economics, to mean the cost of something in terms of an opportunity foregone.

Opportunity Cost
1. The cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action.

Opportunity Cost". High School Economics Topics.
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The cuneiform inscription in the Liberty Fund logo is the earliest-known written appearance of the word "freedom" (amagi), or "liberty.

it hopes to bring to market in five years is foregoing the profits it could earn by spending the money on marketing existing products. Every action taken involves the loss of the opportunity to do something else. The estimation of opportunity costs ...

Opportunity cost
The true cost of something is what you give up to get it.

Opportunity Cost
The rate of return you likely would have achieved for capital in an alternative investment from the one you chose.

Opportunity Cost - The cost of passing up one investment in favor of another.

Opportunity Costs: Money or income that is forgone as a result of missed opportunities.
Option: ...

opportunity cost - Resource use options that are given up as a consequence of pursuing one activity among several possibilities. Potential benefits foregone as a result of choosing an alternative course of action.

Opportunity Cost. The cost of not doing something. For example, if your business has excess cash and uses it to purchase an item of equipment, the opportunity cost is the interest you would have earned had that money been earning interest in say, ...

Opportunity cost
When you make an investment decision, there is often a next best alternative that you decided not to take, such as buying one stock and passing up the opportunity to buy a different one.

Opportunity Cost The value or benefit from an alternative proposal, e.g., investment decision, that is foregone in favour of another.

Opportunity Cost = the potential return from alternitive investments forgone by accepting an opportunity to invest.

Opportunity cost of capital:
The expected return which is foregone when funds are invested in a project rather than in financial securities with a comparable level of risk.

Opportunity cost
The value of possible alternatives that a person gives up when making one choice instead of another; also known as a trade-off.

Opportunity costs
The difference in the actual performance of a particular investment and some other desired investment adjusted for fixed costs and execution costs. It often refers to the most valuable alternative that is given up.

Opportunity Cost: A basic term from the disciplines of economics and accounting. In these circles the acceptable definition of the word is, "The advantage forgone as the result of the acceptance of an alternative." ...

Opportunity cost of capital The normal rate of return or the available return on the next-best alternative investment. Economists consider this a cost of production, and it is included in our cost examples.

opportunity cost the value of the next-best foregone alternative that was not chosen because something else was chosen. (2) ...

opportunity cost: A valuable alternative which is given up when a particular investment is made.
options: Financial instruments which give the owner the right to buy or sell a security on a future date at a fixed price.

Opportunity costs
The difference in the performance of an actual investment and a desired investment adjusted for fixed costs and execution costs. When not all desired trades can be implemented. Most valuable alternative that is given up.

opportunity costs Transaction costs arising from orders that are not fulfilled on the day they are placed.
option A type of derivative instrument.

Opportunity cost approach - (Management) Refers to the decision method in which the concept of opportunity cost is applied to solve a short-term, non routine decision problem.

OPPORTUNITY COST: The highest valued alternative foregone in the pursuit of an activity. This is a hallmark of anything dealing with economics--and life for that matter--because any action that you take prevents you from doing something else.

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Opportunity cost, also referred to as economic cost is the value of the best alternative that was not chosen in order to pursue the current endeavour-i.e, what could have been accomplished with the resources expended in the undertaking.

Opportunity costs incurred prior to the bankruptcy process such as the loss of sales or financing.
Implicit tax
Lower or higher before-tax required returns on assets that are subject to lower or higher tax rates.

Opportunity cost is the benefit forgone when an action is taken. Opportunity costs are not captured by the accounting system. Nevertheless, they may be relevant to certain types of decisions and will need to be determined or approximated.
Option ...

Measures the opportunity cost incurred by a company for holding the level of required capital.

Opportunity cost
The cost of something in terms of opportunity foregone.

cash flows at the opportunity cost of capital. For example, if investors want to value a one-year promissory note of $100, and the one-year interest rate is 10%, they conclude that the note is worth $100/1.10 = $90.91.

Implicit Bankruptcy Costs Opportunity costs incurred prior to the bankruptcy process such as the loss of sales or financing. Implicit tax Lower or higher before-tax required returns on assets that are subject to lower or higher tax rates.

Target cash balance Optimal amount of cash for a firm to hold, considering the trade-off between the opportunity costs of holding too much cash and the trading costs of holding too little cash. Target company Often used in risk arbitrage.

For example, if the opportunity cost of funds is 10%, the present value of $100 to be received in one year is $100 x [1/(1 + 0.10)] = $91.

Valuation Opportunity Cost The potential increase in firm value associated with investments that are for gone due to capital rationing.

opportunity cost The rate of return that could be earned on an alternative investment. opportunity risk The risk that a better opportunity may present itself after one has already committed his money elsewhere.

In an economic sense, the ratio or proportionality between the value of the human end achieved ("benefits" or "satisfactions") and the value of the scarce resources expended to achieve it (opportunity costs).

Imputed costs consist of the Opportunity Costs of time and capital that the manager has invested in producing the given quantity of production and the opportunity costs of making a particular choice among the alternatives being considered.

Negative Leverage - Is a concept which states that there is an opportunity cost loss associated with the purchase of an option on a future.

Interest rates on bank loans and overdrafts
The opportunity cost of capital - the return that could be earned if invested in another title
Limits to the level of bank lending permitted
The risk that the publisher is prepared to take ...

The loss of this opportunity has a cost that must be considered in the final decision. Accountants (and economists and others) may use the term opportunity cost to describe the cost of foregone opportunities.

Trade liberalisation allows countries to specialise in producing the goods and services where they have a comparative advantage (produce at lowest opportunity cost). This enables a net gain in economic welfare.
Lower prices.

rate of return that a business could earn if it chose another investment with equivalent risk-in other words, the opportunity cost of the funds employed as the result of an investment decision.

In addition to the direct cost of physical storage, there is also an opportunity cost to cover, because the money tied up in the commodity could be earning interest elsewhere.
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Definition: This occurs when the full opportunity cost of the extra unit equal the value placed by society on its consumption.
Related glossary term:
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This is due to the huge opportunity cost in selling forward future gold production. Forward contracts with average prices below spot gold prices can lead to losses that ultimately penalize shareholders.

ECONOMIC PROFITS - the difference between the total revenue and the total opportunity costs.
ECONOMIC RENT - Currently referred to as market rent, it is the rental income that real estate can comm...

Comparative Advantage - A comparative advantage exists when a nation or economic region is able to produce a product at a lower opportunity cost compared to another nation or region.

The upper and lower limits on the acceptable level of cash that minimizes the sum of the opportunity cost of excessive cash and the cost of marketable security transactions.
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Optimal amount of cash for a firm to hold, considering the trade-off between the opportunity costs of holding too much cash and the trading costs of holding too little cash.
Target company ...

This phenomenon is sometimes described as opportunity cost. That's one reason you may want to emphasize investments that don't pay much current income in your taxable accounts.

Price that shows the social value of a good or a service (see also accounting price, economic price) and is the opportunity cost of any resource allocation.
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Common stock of a company that has an opportunity to invest money and earn more than the opportunity cost of capital.
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Imputed value
Refers to the value of an asset, service, or company that is not physically recorded in any accounts but is implicit in the product e.g. The opportunity cost of cash remaining in a savings account and not being invested.

For certain investments there is risk involved and you may lose everything, for savings accounts though and similar there is an opportunity cost, the difference between what you get from one option over another.

CARRYING CHARGE
The total cost of storing a physical commodity over a period of
time. Includes storage charges, insurance, interest, and
opportunity costs.

Here, the focus is to estimate the cost, in today's dollars, required to recreate the business goodwill. Under the component build-up method, you estimate the opportunity cost of lost income were the business to be rebuilt from scratch.

See also: Expense, Cost of capital, Banks, Values, Opportunity costs