2006-09-05 20:20:13 · 5 answers · asked by PRASHANTH HEGDE 1 in Business & Finance ➔ Other - Business & Finance
The Opportunity cost of capital is the expected return forgone by bypassing of other potential investment activities for a given capital.
VR
2006-09-05 22:22:58 · answer #1 · answered by sarayu 7 · 0⤊ 0⤋
Opportunity cost is a term used in economics to mean the cost of something in terms of an opportunity forgone (and the benefits that could be received from that opportunity), or the most valuable forgone alternative.
Opportunity cost of capital means, Expected return that is foregone by investing in a project rather than in comparable financial securities
2006-09-05 20:25:44 · answer #2 · answered by Mahesh K 1 · 0⤊ 0⤋
I have a degree in Finance, and if I remember correctly from school it means that it is whatever you have to give up in order to make a certain investment. For example, if you invest $50,000 in a car, you cannot invest $50,000 in an around the world cruise. The around the world cruise is the opportunity cost.
2006-09-05 20:23:43 · answer #3 · answered by Kev 5 · 0⤊ 0⤋
It's been awhile since I earned my MBA in finance but my 1st consideration would be to determine the cost of the capital you are considering it's NPV vs. it's FNV.
2006-09-05 20:29:27 · answer #4 · answered by iraq51 7 · 0⤊ 0⤋
omg i have to study economics as a freshman in highschool
2006-09-05 20:26:44 · answer #5 · answered by sweetbee108666 2 · 0⤊ 0⤋