The value of the benefit sacrificed when one course of action is chosen, in preference to an alternative. The opportunity cost is represented by the forgone potential benefit from the best rejected course of action.
The value differential be- tween alternative investments with differing rates of return.
The economic sacrifice that arises from having to forego attractive alternatives. It is an implicit cost in that it entails no actual cash outflows and is estimated by considering the value of benefits foregone. The cost of using your capital for one investment versus another. For example, if you have $10,000 in one investment, this is $10,000 that cannot be used elsewhere.
is widely used in business planning in evaluating capital investment. A company measures the projected return against the anticipated return it would receive on a highest yielding alternative investment that contains a similar risk profile.
The next best benefit foregone. Also referred to as the contribution margin given up by not doing an activity. For example, if a sole proprietor is foregoing a salary and benefits of $50,000 at another job, the sole proprietor has an opportunity cost of $50,000. Accountants do not record opportunity costs in the general ledger or report them on the income statement, but they are costs that should be considered in making decisions. To Top
The next best alternative that must be foregone when something is produced. For example, the opportunity cost of investing in new machinery may be the interest that could have been earned by leaving the money in the bank.
the cost of an undertaking in terms of the preferred opportunity foregone, that is, the alternative way that the user might have chosen to use the resources (an option that is no longer available when the decision is made)
The cost of pursuing one course of action measured in terms of the foregone return that could have been earned on an alternative course of action that was not undertaken.
A valuable alternative which is given up when a particular investment is made.
When you have a choice between two or more alternatives, you will choose the best alternative. However, choosing the best alternative means you can't choose the next-best alternative. Opportunity cost is the next-best alternative that must be sacrificed in order to get something else you want. Opportunity cost can be thought of as "the road not taken". i.e. You have to choose between buying a stock that pays a 3% dividend yield plus capital gains and a bond that has a yield to maturity of 8%. If you choose to buy the stock your opportunity cost would be the 8% interest you could have made by buying the bond. See also "Cost of Carry".
An economic term relating to the highest and best use of one's time, assets, or talents. For example, the opportunity cost to a plaintiff for managing his own portfolio is the amount of money he could have earned had he spent that time working. To the top
The return on the best alternative use of an asset, or the highest return that will not be earned if funds are invested in a particular project.
The actual value a firm loses when it makes a decision. This may or may not be the same as the accounting cost. For example, if you give a diamond ring that you purchased 15 years ago to your daughter, your opportunity cost is not what you paid for the ring 15 years ago, and it is not the retail appraised value from your local jeweler. The opportunity cost is what you could have sold the ring for if you had not given it away, or the actual dollar value you are losing by making the decision to give it away.
The cost of an economic activity foregone by the choice of another activity.
in marketing decision making (assuming scarcity of resources and that choices have to be made on how to allocate funds), the value or worth of the best alternative use for a particular resource, i.e., the next best choice or what must be given up in taking a particular course of action; e.g., the value of a sports event sponsorship that was forgone for a traveling art exhibit sponsorship or the value of a sales promotion activity that was given up when the available funds were allocated to advertising. Also known as economic cost.
The opportunity cost of selecting a particular health technology is the amount of alternative health technologies that could have been obtained had that selection not been made.
See cost-benefit analysis.
generally intended to refer to foregone economic value when a productive resource, such as labor, capital, land, or fish, is used to produce one good or service instead of something else.
The highest price or rate of return an alternative investment would provide. In security investing, it is the cost of forgoing a safe, generally fixed return, for the opportunity of realizing a higher level of profit.
The most valuable alternative that is forfeited by engaging in a given activity.
The cost of forgoing one investment in favor of another.
The rate of return available on the best alternative investment.
The opportunity cost of a farm management decision is the amount of money which is given up by choosing one alternative rather than another.
The cost of what you didn't do. For instance, if you have the cash to buy a car, the opportunity cost of the purchase is the interest lost on the cash you used for the car. One of the often-cited advantages of leasing is that it frees up your money to invest elsewhere.
A method to determine the cost of common equity component of return using the cost of capital of other investments of similar risk.
The value of the best alternative to a given choice, or the value of resources in their next best use. In regard to time, the opportunity cost of time spent on one activity is the value of the best alternative activity that the person might engage in at that time.
In economic terms, the price or rate of return that the best alternative course of action would provide. In the case of watershed management, opportunity costs represent the potential benefits a watershed manager might forgo by adopting sustainable management practices.
The amount of income lost as a result of not choosing the best alternative from a group of investment choices.
Opportunity costs occur when a revenue yield manager books a room in a hotel at a lower price level and then subsequently has materialized demand for the same room at a higher rate. Opportunity costs occur both in a real or actual way, or in an expected sense: with stochastic demand, the revenue yield manager is never quite sure of the actual opportunity costs for a given room, because demand is uncertain to materialize. However, it is possible to compute expected opportunity costs on an ongoing basis from historical demand data, and then use that information to refine pricing policy and the time of rate close-outs.
The forgone benefit of the next best alternative that must be given up when scarce resources are used for one purpose instead of another. View Capstone Lesson(s) that address this concept
The maximum worth of a good or input among possible alternative uses.
the value of the next-best forgone alternative that was not chosen because something else was chosen.
An approach that views cost as a sacrifice rather than financial expenditure - a benefit forgone. The opportunity cost is the value of the next best alternative use of the resources under consideration.
The most highly valued sacrificed alternative; the value of the "next-best" choice.
The next-best alternative (or the value of that alternative) that a person gives up in making a choice.
cost in terms of foregone alternatives
an opportunity lost by the judge, NOT by other real world actors
The opportunity cost is the returns foregone from putting money in one investment rather than another. Smart investors will weigh the consequences of their investment actions carefully before committing their capital.
The loss of the next best alternative whenever a decision is made involving two or more options.
Anything else that needs to happen before you can play a card or pull off a combo. For example, the opportunity cost of a State is that you must have a Character (or whatever) already in play to put the State on. And the opportunity cost of Bite of the Jellyfish is that you must wait until an opponent burns a Site before you can play it. When building a deck, it's important to consider the opportunity cost on top of the power and resources required to play a card. Typically, "high opportunity cost" means that a lot of things must be true before you can play the card (you won't be able to play it very often). [Note that this is not the definition of "Opportunity Cost" from an economics textbook - what you give up in order to do something else - but it seems to be how most CCG players think of it
Cost of goods and services that must be given up in order to obtain other goods and services.
The value of goods or services foregone, including environmental goods and services, when a scarce resource is used for one purpose instead of for its next best alternative use
The potential benefit that is given up when one alternative is selected over another.
When a decision is made from a range of choices, the second best choice not taken is the opportunity lost. Opportunity lost = opportunity cost. Limited resources require people to make choices between alternatives.
The value of any alternative that one must give up when one makes a choice.
The income or benefit foregone by not using resources for the best other alternative.
Most valuable alternative that is given up. The rate of return used in NPV computation is an opportunity interest rate.
the potential return from alternitive investments forgone by accepting an opportunity to invest.
Refers to the highest price or rate of return an alternative course would provide.
The difference between the yield that funds earn in one use and the yield they could have earned had they been placed in an alternative investment generating the highest yield available.... read full article
The value of the best alternative use of a resource. This consists of the maximum value of other outputs we could and would have produced had we not used the resource to produce the item in question.
Resource-use options that are forfeited as a result of pursuing one activity among several possibilities. This can also be described as the potential benefits foregone as a result of choosing another course of action.
The cost of an investment, in terms of lost returns from alternative investments not taken or kept. For example, if an investor takes $50,000 out of a mutual funds account to make a down payment on a commercial property investment, the withdrawn funds (now down payment) comes at a cost. If that mutual funds account has been generating a 9.25% annual return, the investor is losing that return. That is the opportunity cost for this down payment and acquisition. The smart investor must consider what the commercial property investment is offering in net. If the property investment is only generating a 10% return, the investor is only coming out about 0,75% ahead. But that slight improvement may turn negative when you consider the higher risk that the real estate may entail over the mutual funds account.
a useful concept in evaluating alternate opportunities. If you choose alternative A, you cannot choose B, C, or D. What is the cost or loss of profit of not choosing B, C, or D? This cost or loss of profit is the opportunity cost of alternative A. In personal life you may buy a car instead of taking a European vacation. The opportunity cost of buying the car is the loss of the enjoyment of the vacation.
the cost of a resource, measured by the value of the next-best, alternative use of that resource
The value of an opportunity that is lost or sacrificed when the choice of one course of action requires that another course of action must be given up. A non- accounting value that can be significant in certain circumstances, usually as a consequence of limited resources. It is measure d by the profit that could have been generated had the resources been available. [D05153] 40
The cost of something in terms of opportunity foregone. The opportunity cost to a country of producing a unit more of a good, such as for export or to replace an import, is the quantity of some other good that could have been produced instead.
Represents the value of goods and services that society loses by forgoing allocation of a resource to its best alternative use. While market prices generally reflect opportunity costs, adjustments may be necessary in certain instances - e.g., when the size of a project is so substantial that it may actually influence the market price of a resource.
The cost of selecting one alternative is the benefit foregone from the next best alternative. Also see discount rate.
The economic value of a benefit that is sacrificed when an alternative course of action is selected.
Earnings that may be available on alternative investments.
The price paid for not investing in a different investment. It is the income lost from missed opportunities. Had the money not been invested in land, earning 5%, it could have been invested in T-Bills, earning 10%. The 5% difference is an opportunity cost.
the next best alternative that is given up when a choice is made.
when a choice is made, the value of the best forgone opportunity (190)
the next best alternative; e.g. the opportunity cost of a decision is what was missed out on by foregoing the next best decision
The value of a benefit sacrificed in favor of an alternative course of action. That is the cost of using resources in a particular operation expressed in terms of forgoing the benefit that could be derived from the best alternative use of those resources.
For planning purposes, the benefit that is forfeited or given up in choosing one decision alternative over another.
In making a decision, the foregone potential of not following an alternative course of action. Optimum. Most suitable, best.
the most valuable alternative not chosen when making a decision. At the amusement park, a tour of the haunted house might be the opportunity cost for taking a ride on the roller coaster.
The benefit foregone from not using a good or resource in its best alternative use. Opportunity cost measured at economic prices is the appropriate value to use in project economic analysis for valuing nonincremental outputs and incremental inputs.
The cost of spending funds on one investment instead of another.
The rate of return that can be earned from the best alternative investment.
The cost of passing up one investment in favor of another. For example, if you are receiving payments on a note at five percent interest, but could invest elsewhere for eight percent, then the opportunity cost of not selling the note to invest is three percent.
The foregone benefit of the next best alternative when an economic decision is made. If the class chooses to go to the library to work on their computer skills instead of having recess, then opportunity cost of the choice is having recess.
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."
refers to the next best alternative given up in order to obtain a good or service.
The value of the benefit that is given up by selecting one alternative instead of another. p. 339
The value that one gives up by selecting one of several mutually exclusive alternatives.
The potential benefit that is foregone from not following the best (financially optimal) alternative course of action.
The cost of using money one way as opposed to using it in another, more economically advantageous way. For example, the loss of interest experienced as a result of removing money from a savings account to be used as a down payment on a vehicle.
The opportunity cost of an activity (or choice) is the highest-valued alternative activity which is forgone. In economic decision-making, one goal is usually to minimize the opportunity cost of the selected activity.
(see cost, economic or opportunity)
A term used in economics; when taking a particular action, the loss of the value of the next best action.
The implicit cost associated with investing money in a certain activity. Making that investment means that the same money cannot be invested elsewhere, where it might earn a higher interest rate. [
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The cost of any choice as measured by the value of the best alternative foregone. Thus the opportunity cost of a resource is its value in its best alternative use. For practical purposes, when considering a whole economic unit, the opportunity cost is often defined as the market value.
In economics, opportunity cost, or economic cost, is the cost of something in terms of an opportunity forgone (and the benefits that could be received from that opportunity), or the most valuable forgone alternative (or highest-valued option forgone), i.e. the second best alternative. For example, if a city decides to build a hospital on vacant land that it owns, the opportunity cost is some other thing that might have been done with the land and construction funds instead. In building the hospital, the city has forgone the opportunity to build a sporting center on that land, or a parking lot, or the ability to sell the land to reduce the city's debt, and so on.