What is the opportunity cost calculator?

The Opportunity Cost Calculator is a tool used to quantify the potential value lost when choosing one option over another. Opportunity cost refers to the benefits or value that could have been gained from choosing an alternative course of action. The formula for calculating opportunity cost is as follows:

How do you calculate opportunity cost for a business investment?

Use this simple formula to calculate opportunity cost for a potential business investment: The more you can inject real data — like market-rate salaries, average rate of return, customer lifetime value, and competitor financials — into your projection, the better.

What is opportunity cost?

Opportunity cost represents the potential benefits that a business, an investor, or an individual consumer misses out on when choosing one alternative over another. While opportunity costs can't be predicted with total certainty, taking them into consideration can lead to better decision making.

What is the opportunity cost of a stock?

The opportunity cost is a difference of four percentage points. In other words, if the investor chooses Company A, they give up the chance to earn a better return under those stock market conditions. Although some investors aim for the safest return, others shoot for the highest payout. This investor selects the riskier option.