opportunity cost
Definition
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.
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Related Terms
cost of capital, cutoff point, idle, comparative advantage, economic value added
'opportunity cost
' appears in the definitions of these other terms on BusinessDictionary.com Austrian School of Economics, economic cost, implied cost, cost value logic, economic analysis, and 
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