Opportunity Cost

Opportunity apostrophize for finish making: A commandment method resource to describe the difficulties of practice INTRODUCTION: The difficulties associated with the function of opportunity price as a stopping prime making aid atomic number 18 for the most part not discussed in the management accounting connect texts. still most of the new management texts devote at least(prenominal) some coverage to the calculation of relevant cost and benefits for the last making, and ordinarily the concept of opportunity cost is apply as an integral part of this coverage. Opportunity cost is be by many of the economists, but the main focus of all unmatched of them is on the contribution or profit that is forgone (rejected) by development readyed resources for particular purpose. OC remains at the face of study of decision making today, it being seen as expedient both in the calculation of merit of competing alternating(a)s and as a way describing the preferred alterna tives. This research paper comprises of following(a) parts: Strengths and boundary of Opportunity Cost. A worked example that elaborate the difficulties which may limit OC as a practical decision aid. An alternative cash in flow approach that overcome the difficulties by the use of OC approach. reciprocation and Conclusions.

STRENGTHS AND LIMITATIONS OF OPPURTUNITY COST: As a decision making aid, OC is commonly seen to have three areas of strength: 1.It forces term of all alternative course of action 2.It is a convenient, expedient and stinting technique of analysis 3.It has certain communication advantages. It can highlight the boilers f! ace benefit of a particular decision. Exploring of the above strengths are as follows: ?Decisions are concerned with choices between alternatives and, consequently, any method of attain costs and revenues for decisions which attempts to deal with opportunities in isolation is unlikely to intend a complete analysis.The main importance of the opportunity-cost concept is that it forces the decision...If you wish to get a full essay, order it on our website: OrderCustomPaper.com

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