OPPORTUNITY COST
Opportunity Cost is also known as Alternative Cost. It is
something which we give for something else. A best choice is need to be made
among several alternative options. We have to chose such type of alternatives
from which we can get benefit.
For example
You have Rs
5,00,000 and choose to invest it in a product line that will generate a return
of 6%. If you could have spent the money on a different investment that would
have generated a return of 8%, then the 2% difference between the two
alternatives is the foregone opportunity cost of this decision.
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