opportunity cost

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Words related to opportunity cost

cost in terms of foregoing alternatives

References in periodicals archive ?
From this point of view, decision of investment of a certain amount of financial funds, in order to build up a certain investment project, will be adopted only if it can be verified opportunity cost of capital is smaller than internal rate of return (4).
0] and M differentiates whether there is an overlap of these two parts of interest, which may cause the change of the retailer's annual opportunity cost of capital.
The opportunity cost of capital invested in drug discovery, development and commercialization is the return required to compensate investors to invest in time-consuming and risky R&D.
As Equation (1) explains, the opportunity cost of capital depends on equilibrium returns, the opportunity cost of capital and the return standard deviations are simultaneously determined.
knows the expected rate of increase of costs in the industry concerned, the expected rate of increase of the price of the product of the industry concerned, and the order of magnitude of the expected 'normal', 'natural' or 'reasonable' rate of profit, the opportunity cost of capital for the particular industry.
As illustrated in the income capitalization model, interest rates play a role in determining the value of farmland as they are a fundamental determinant of the opportunity cost of capital and thus the capitalization rate.
He also recognizes that, from time to time, when there is excess capacity, the opportunity cost of capital will drop.
In equilibrium, the opportunity cost of capital must be equal to the sum of the cash flow plus the expected (and actual) appreciation.
Of course, the opportunity cost of capital will generally exceed the financial cost of capital because one does not normally borrow money in business affairs unless one expects to make a profit on the money borrowed.
Hence, the opportunity cost of capital or required rate of return will typically depend on total risk, not just systematic or market risk, in these circumstances.
where k is the (marginal) opportunity cost of capital and the CF are (point estimates of uncertain) end-of-period incremental cash flows (i.
The real rate of interest is the opportunity cost of capital independent of inflation.
Acquiring capital from internal sources requires that executives determine the opportunity cost of capital invested to back businesses and strategies.
If we were even less risk tolerant, the opportunity cost of capital may be the return on U.
However, the EMH does not prevent firms from earning economic rents, defined as profits that cover the opportunity cost of capital, which is a concept identical to EVA.
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