Article
Opportunity Cost: Definition, Formula, and Examples
investopedia.com
Quoted on this wiki
Every place a page here uses this source, in the order the words come in it.
How Do You Predict Opportunity Cost? “Any effort to make a prediction must rely heavily on estimates and assumptions.” The Bottom Line
Key Takeaways “Opportunity cost is the value of the next-best alternative you didn’t choose.” Evaluating opportunity cost requires comparing the benefits and trade-offs of all available options.
Factoring in opportunity cost helps individuals and businesses make better decisions. “Opportunity cost is an internal measure used for planning and is not reflected in accounting profit or financial statements.” Common examples include choosing between investments, locations, hiring decisions, or capital upgrades.