Opportunity cost of capital

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Opportunity cost of capital

Expected return that is forgone by investing in a project rather than in comparable financial securities.

Opportunity Cost of Capital

The difference in return between an investment one makes and another that one chose not to make. This may occur in securities trading or in other decisions. For example, if a person has $10,000 to invest and must choose between Stock A and Stock B, the opportunity cost is the difference in their returns. If that person invested $10,000 in Stock A and received a 5% return while Stock B makes a 7% return, the opportunity cost is 2%. One way of conceptualizing opportunity cost is as the amount of money one could have made by making a different investment decision. Importantly, opportunity cost is not a type of risk because there is not a chance of actual loss.
References in periodicals archive ?
Standardized placement options would allow for greater cost controls, but consulting activities and the requisite intellectual capital to provide appropriate solutions to emerging insurers will create alternative costs that must be divided between clients and insurers.
John West, Ventrix Management and Diamonds all battled it out for a mid-table finish and unfortunately Alternative Costs and DHL made up the bottom places with the latter losing 11 of their 14 games.
The net result is that the CDCU payday alternative costs the borrower $40, while the payday lenders' short-term loan ends up costing consumers $450.
One participant stated flatly that if the sustainable alternative costs a dollar more than the landfill fee, count him out.
Excluding Restructuring Expenses and Strategic Alternative Costs of $0.
In most cases there is a consensus that alternative costs of generators, when they must reduce production of active power, have to be compensated.
The cost of two or more police officers dealing with the incident; the cost of a twin crew ambulance; the cost of the medical and nursing staff at A&E; and the alternative costs incurred of bona fide patients having to wait longer than necessary for treatment.
Why spend a fortune on big brand hair gels, whenJayne's easily available alternative costs a fraction of the price?
Management must anticipate long-term business needs in looking at new technology costs and weighing those costs against alternative costs.
Alternative costs of retirement communities and other housing.
In contrast, $1 billion in advances on SECU's payday alternative costs Credit Union members just $5.
A Brochure On CD Product Showcase -- DVD And Print Catalogue Alternative costs as little as $0.

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