Opportunity Cost - Deepstash

Opportunity Cost

An opportunity cost is the potential ‘alternative’ or benefit that is forfeited when one chooses a particular option.

The other, foregone option, if it is lower than other companies, is the key factor in this trade-off.

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"You have to go broke three times to learn how to make a living." ~ Casey Stengel

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Calculating Opportunity Cost

The way to calculate the opportunity cost is to subtract the value of the option from the value of the alternative that is foregone.

Opportunity Cost = Return on the best foregone alternative - Return on the chosen option.

Opportunity Cost

It is the estimated value of the best alternative or the best option that one misses out as a consequence of picking one particular option.

Example: Spending a limited resource, like Money, on healthcare, comes with the 'opportunity cost' of being unable to spend that amount on ed...

Opportunity Cost

Opportunity Cost

Saying 'yes' to something automatically means saying 'no' to other possibilities. This is known as Opportunity Cost. It translates into the potential benefits that we miss by choosing one option over another.

Subconsciously we are aware that we can't do everything we want ...

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