opportunity cost
DefinitionThe 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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opportunity cost is ...
... part of the Strategies and Business subjects.
... part of the Strategies and Business subjects.
... #41 on our list of the most popular terms.
Related Terms
comparative advantage, economic value added
opportunity cost appears in the definitions of these other terms on BusinessDictionary.com
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