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What is opportunity cost?

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disneytick
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The cost of passing up the next best choice when making a decision. For example, if an asset such as capital is used for one purpose, the opportunity cost is the value of the next best purpose the asset could have been used for. Opportunity cost analysis is an important part of a company's decision-making processes, but is not treated as an actual cost in any financial statement.
Post Wed May 08, 2013 11:27 am
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BlushingFlies
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An opportunity cost is not always a number. The opportunity cost of any action is simply the next best alternative to that action - or put more simply, "What you would have done if you didn't make the choice that you did".
Post Thu May 09, 2013 11:11 am
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AndrewRhodes
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Simply it is the value of the next best purpose the asset could have been used for. It is the most helpful thing for company future investments etc..
Post Thu Jun 20, 2013 7:46 pm
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Ryaan
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In economics“opportunity cost” is the value of the next-highest-valued alternative use of that resource. If, for example, you spend time and money going to a movie, you cannot spend that time at home reading a book, and you cannot spend the money on something else. If your next-best alternative to seeing the movie is reading the book, then the opportunity cost of seeing the movie is the money spent plus the pleasure you forgo by not reading the book.
Post Thu Nov 07, 2013 9:52 am
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