opportunity cost

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opportunity cost

n. Economics
The net value or utility of the most desirable alternative to a projected course of action.

opportunity cost

n
(Economics) economics the benefit that could have been gained from an alternative use of the same resource

opportunity cost

The benefit that is sacrificed by choosing one course of action rather than the next best alternative, e.g. the opportunity cost sacrificed in building a road might be use of the land for farming.
ThesaurusAntonymsRelated WordsSynonymsLegend:
Noun1.opportunity cost - cost in terms of foregoing alternatives
cost - the total spent for goods or services including money and time and labor
capital cost, cost of capital - the opportunity cost of the funds employed as the result of an investment decision; the rate of return that a business could earn if it chose another investment with equivalent risk
carrying cost, carrying charge - the opportunity cost of unproductive assets; the expense incurred by ownership
References in periodicals archive ?
CairoAaAaAeA{Es Naeem Brokerage stated, AaAaAeA{AaAaAeA While we expect a market-wide corr as an immediate reaction to the increased opportunity cost of capital, the impact should be felt more on companies that are excessively leveraged.
As the global opportunity cost of capital rises alongside US Treasury yields, and as the dollar surges simultaneously, investors once again will fear another exodus of capital from EM.
Formula above should not, and we can state cannot constitute a distraction; namely, internal rate of return is not opportunity cost of capital in disguise, because these two notions are individuated, to the effect that (3):
During the time interval [M, T], the retailer should bear the opportunity cost of capital for the item in stock, which is due to the cash payment at the end of credit period M.
In the spot market, you'd have to "pay for storage, transportation, insurance, opportunity cost of capital, etc.
LIBOR essentially represents the opportunity cost of capital -- capital in the Western definition -- for a select panel of banks.
Since strategy fundamentally involves making choices to allocate limited organisational resources one way rather than another, the notion of the opportunity cost of capital must form an essential basis for business strategy formulation.
The notion of the opportunity cost of capital is widely accepted within economics, although, as we discuss below, the methods used to estimate its value are contested.
Roden and Manuel (2012) argue that financial managers should include the cost of permanent current liabilities as a component in calculating the opportunity cost of capital.
This makes it profitable for companies to store the commodity and "enter into contracts to sell futures contracts on the commodity, even after accounting for storage costs and opportunity cost of capital (i.
for government or corporate bonds) represent the opportunity cost of capital, and that cost should not influence government investment.
We are developing some evaluations of the opportunity cost of capital for investors of venture capital firms (limited partners, LP) and entrepreneurs.

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