Opportunity cost is used to calculate different types of company profit. <ul><li>The most common type of profit analysts are familiar with is accounting profit. Accounting profit is the net income calculation often stipulated by Generally Accepted Accounting Principles (GAAP). Only explicit, real costs are subtracted from total revenue.</li><li>Economic profit (and any other calculation above that considers opportunity cost) is strictly an internal value used for strategic decision-making. There are no regulatory bodies that govern public reporting of economic profit or opportunity cost. </li></ul>

Economic Profit and Accounting Profit

Opportunity Cost = Return on best foregone option (FO) – return on chosen option (CO)The formula for calculating an opportunity cost is simply the difference between the expected returns of each option. company is faced with the following two mutually exclusive options:

Formula and Calculation of Opportunity Cost

The key difference is that risk compares the actual performance of an investment against the projected performance of the same investment, while opportunity cost compares the actual performance of an investment against the actual performance of another investment.The key difference is that risk compares the actual performance of an investment against the projected performance of the same investment, while opportunity cost compares the actual performance of an investment against the actual performance of another investment.Still, one could consider opportunity costs when deciding between two ri<warningtag>sk profiles.</warningtag>

Opportunity Cost and Risk

Opportunity costs represent the potential benefits an individual, investor, or business misses out on when choosing one alternative over another. Because opportunity costs are unseen by definition, they can be easily overlooked. Understanding the potential missed opportunities when a business or individual chooses one investment over another allows for better decision-making.

What Is Opportunity Cost?

The downside of opportunity cost is it is heavily reliant on estimates and assumptions. There's no way of knowing exactly how a different course of action may have played out financially. Therefore, to determine opportunity cost, a company or investor must project the outcome and forecast the financial impact. This includes projecting sales numbers, market penetration, customer demographics, manufacturing costs, customer returns, and seasonality.

How Do You Determine Opportunity Cost?

Learn to evaluate life and business choices via the lens of Opportunity Costs

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Problem Solving

business

Business

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Money & Investments

What Is Opportunity Cost

Considering the value of opportunity costs can guide individuals and organizations to more profitable decision-making.

Opportunity cost is the potential forgone profit from a missed opportunity—the result of choosing one alternative and forgoing another.

Opportunity Cost Formula, Calculation, and What It Can Tell You

For nearly a year, about four million US workers quit their jobs every month for better pay or roles that align more with their values. This contributed to the hiring crisis that's seeing great competition for talent. Other countries find themselves in the same situation. Many workers are tempted to change jobs due to the scramble for candidates. Recruiters oversell positions with flashy sales pitches, and candidates may miss some red flags.

Why regret is on the rise

Many workers are happy in their new positions amid the Great Resignation. But in hindsight, not everyone is pleased with their decisions. According to a March survey of around 2,000 US workers who quit their job in the past two years, about one in five said they regretted doing so. Many employees expressed remorse for their new role.

Regret over joining the Great Resignation

When colleagues resign in a hot job market, workers may feel they are missing out. They may view all other companies with rose-tinted glasses and overweigh the positives of trying something new. Currently, it is also easier to quit than to have tough conversations with management. But people often don't realise that every job has its own issues, leading to intense quitter's remorse.

The grass is greener on the other side

It is common for new employees to reminisce over previous workmates and past tasks and then feel regret. Quitter's remorse can cloud an employee's judgement. During a difficult transition, a worker in the current job market may be quick to quit again. The danger is constantly restarting the cycle. The best is to acknowledge regret and then push through those feelings while adjusting and building up your relationships and effectiveness at the new job.

Regret as part of the job

Plenty of workers are happy in their new positions amid the Great Resignation. But for some, hindsight is 20/20.

career

Career

Quitter's remorse: The workers who regret resigning

A likely culprit of this mojo rejuvenation is the COVID-19 pandemic. In 2020, Americans found their lives upended by shutdown measures. They were laid off. They became their children’s full-time teachers and part-time social outlets. Those lucky enough to keep their jobs struggled as their industries transformed amid ever-revolving kaleidoscopes of rules and mandates. All of which generated immense stress that eroded people’s well-being.

The Main Reason For The Great Resignation

The lesson from this moment in history is not that people are quitting. It’s that they’ve decided to seize the moment and work for something better. Good enough is no longer good enough. They want meaningful lives, work that is fulfilling, and the opportunity to strive for their passions. Whether that comes from a large do-over moment or a small change is irrelevant. Either way, we’ve entered the Great Affirmation.

The Great Affirmation

Workers are now prioritizing flexibility, work-life balance, and benefits more than salary. Additional motivators are dissatisfaction, a search for safer working environments, a desire for work that aligns with skills and values, and better pay.

Reconsidering Priorities

<ul><li>Nearly 20 million Americans quit their jobs between April and August this year, and the trend seems to be accelerating. </li><li>Now dubbed the Great Resignation, this employment exodus stems from workers’ desire to find more fulfillment in life and work. </li><li>While quitting may benefit some, experts agree that smaller adjustments can have sanguine results, as well.</li></ul>

Key Takeaways

Jumps are voluntary changes. You choose to change your situation, and you do so. Those joining the Great Resignation are taking this leap.It becomes complicated when we hit a ceiling. These do-over moments aren’t barriers to your progress. When you hit a ceiling, you need to make a jump, but you are voluntarily standing still. You are the barrier.Sometimes when you’re stuck, you have to ask, “Am I blaming other people right now? Am I blaming my boss? Am I blaming the economy? Am I blaming coworkers?”

Taking The Leap: Jumps And Ceilings

They happen outside your control, and you have to decide how to respond. If the restaurant you worked at closed during the pandemic, you encountered a negative moment. If a former coworker offers you an attractive new job because of the current labour shortage, that’s an unexpected moment.

Involuntary Quitting: Negative Or Unexpected Moments

<ul><li>What is your financial situation?</li><li>What are your family obligations?</li><li>What values should your job align with?</li><li>What job can you secure with your current resume?</li><li>Do you need further education? Reskilling?</li><li>What do you need to maintain your health and mental well-being?</li><li>How do you want to challenge yourself?</li><li>Are you looking to move up the career ladder? A lateral move to a new field?</li></ul>

Ask Yourself This Before Quitting

That depends. Yes, that may be a bit of a dodge, but it’s also the only acceptable response. Such a question can’t be answered in an article or through a multiple-choice quiz. It requires a deep analysis of what makes you satisfied at work, what you need to live a fulfilling life, whether your job meets those needs, and how you want to grow your career. No one can divine whether the stars have aligned in your favour for you.

The Decision Of Joining The Great Resignation

Americans regularly quit their jobs in the ‘60s and ‘70s, but that pace only began to slow in the ‘80s. Among a barrage of <a href="https://www.businessinsider.com/what-happened-to-american-jobs-in-the-80s-2017-7">Reagan-era</a> spending cuts, deregulation, and shifting corporate culture, American workers became devalued in the economy. As their <a href="https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/">purchasing power stymied</a>, they shackled themselves to their jobs — even <a href="https://bigthink.com/the-present/imagine-world-without-bullshit-jobs/">the BS ones</a> — for affordable healthcare and a financial safety net. The era also intensified the cultural belief that today sees quitting as a sign for losers, unloyal job hoppers, or (worse!) <a href="https://www.cnbc.com/2017/05/10/90-of-millennials-will-stay-in-a-job-for-10-years-if-two-needs-met.html">millennials</a>.

The Background

You can only resign if you have a choice.

Millions of Americans are quitting their jobs, but even if you can’t join the Great Resignation, you can still pursue a do-over moment.

Discover the world of business and economics.

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Economics

The Great Resignation is here. Is now the perfect time to quit your job?

Find ways to give back to individuals and the organization before you try to use your influence for your own interests.Who comes to you to get something that they need in order to do their daily work? The more that you respond to that in a timely way and give them what they’re looking for, the better, stronger influence you’ll build with them.

There is always a way you can help others

The ability to collaborate with others also helps build your influence because it strengthens relationships. There’s the kind of influence that you build through collaboration, where you work with people.Get to know people on a personal level. It’s easier to relate to and understand others when you have an idea of what’s important to them, what their personality traits are, and what’s going on in their lives. This makes it easier to come together.

Building a strong network is essential

Understanding the areas in which you may most likely be influential is important, too. If you have special expertise or act as a facilitator or gatekeeper, the way you share and distribute knowledge or resources can make you influential.But there’s a fine line between being a fair guardian of that influence and blowing your own horn too much

Spend your "influence currency" wisely

Influence starts with the areas within your control. First off, focus simply on being good at your job.Being good at your job is one of the basic elements of influence. It lets people know that you’re confident and capable. Failure to do so undermines influence and makes it more difficult for people to trust you.

Focus on what you can control

"Inside the workplace, there’s formal influence, which comes from your position—the responsibility and authority that you’ve been given. But there’s also informal influence, which comes from who you are and how you show up.”

Understand yourself and those around you.

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Psychology

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Leadership & Management

Building influence in the workplace

Describing ourselves on paper, while blindly attempting to live up to the expectations of others, makes it all feel like a giant lie.We’re the experts on ourselves, right? So why do we find it so difficult to convey who we are in text?<ol><li> We’re writing to seek the approval of others. Perhaps the worst part is that we don’t know who’s reading our words or who our competitors are.</li><li>For many of us, though, the main reason we find it so hard to write about ourselves it’s so, so easy to procrastinate. </li></ol>

Describing ourselves on paper

3 Pieces of advice to help overcome autobiographer’s block:<ol><li>Forget the pressure you’re under and just start writing. It may not be pretty, but if you let yourself go on autopilot for a while, the words you jot down will be very telling as to which points you find most important to share about yourself.</li><li>Let someone take a red pen to it. Allow someone to sit down with your personal statement. It’ll help to not only get an objective opinion on your writing style and organization but also get an idea of how a friend would portray you on paper.</li><li>Remember that you’re not alone. Literally, everyone who has ever had a job or gone on to post-secondary education has had to self-promote in some way.</li></ol>

Three tips to unblock

If you’ve ever applied for a job, you know how hard it is to write the perfect cover letter that will make you stand out above all the other applicants. It’s a competitive job market, and more often than…

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The Great Resignation is here. Is now the perfect time to quit your job?

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Opportunity Cost Formula, Calculation, and What It Can Tell You

Quitter's remorse: The workers who regret resigning

The Great Resignation is here. Is now the perfect time to quit your job?

It's time to Read like a Pro.

Building influence in the workplace

CURATED BY

It's time to
Read like a Pro.