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Opportunity cost, as such, is an economic concept in economic theory which is used to maximise value through better decision-making. In accounting, collecting, processing, and reporting information on activities and events that occur within an organization is referred to as the accounting cycle.
In business and for engineering economics in both industrial engineering and civil engineering practice, the minimum acceptable rate of return, often abbreviated MARR, or hurdle rate is the minimum rate of return on a project a manager or company is willing to accept before starting a project, given its risk and the opportunity cost of forgoing other projects.
Similarly, someone can benefit for "free" from an externality or from a public good, but someone has to pay the cost of producing these benefits. (See Free rider problem and Tragedy of the commons.) Finance. In mathematical finance, the term is also used as an informal synonym for the principle of no-arbitrage. This principle states that a ...
Opportunity cost is also often defined, more specifically, as the highest-value opportunity forgone. So let's say you could have become a brain surgeon, earning $250,000 per year, instead of a ...
Opportunity cost is the potential benefits or gains an investor, consumer or business misses out on when one alternative is chosen over another. This might mean spending time at home versus ...
The term can be applied to individual humans and living organisms, groups, organizations, styles, behaviors, and trends. Opportunism or "opportunistic behaviour" is an important concept in such fields of study as biology, transaction cost economics, game theory, ethics, psychology, sociologyand politics. Definitions[edit] Opportunism is the ...
Trade-off. A trade-off (or tradeoff) is a situational decision that involves diminishing or losing on quality, quantity, or property of a set or design in return for gains in other aspects. In simple terms, a tradeoff is where one thing increases, and another must decrease. Tradeoffs stem from limitations of many origins, including simple ...
Managerial economics. Managerial economics is a branch of economics involving the application of economic methods in the organizational decision-making process. [1] Economics is the study of the production, distribution, and consumption of goods and services. Managerial economics involves the use of economic theories and principles to make ...