Opportunity Cost

Opportunity apostrophize for finish making: A commandment method resource to describe the difficulties of practice INTRODUCTION: The difficulties associated with the expend of opportunity price as a stopping rank making aid atomic number 18 slackly not discussed in the management accounting connect texts. just now most of the new management texts devote at least(prenominal) some coverage to the calculation of relevant cost and benefits for the ratiocination 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 single of them is on the contribution or profit that is forgone (rejected) by victimization placeed resources for particular purpose. OC remains at the gist of study of decision making today, it being seen as useful both in the calculation of merit of competing alternating(a)s and as a way describing the preferred alternatives. This research paper comprises of following(a) parts: Strengths and limitation of Opportunity Cost. A worked example that elaborate the difficulties which may limit OC as a practical decision aid. An alternative immediate payment flow approach that overcome the difficulties by the use of OC approach. intervention 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 proficiency of analysis 3.It has certain communic ation advantages. It can highlight the boil! ers crusade 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 honor costs and revenues for decisions which attempts to deal with opportunities in isolation is unlikely to understand a complete analysis.The main importance of the opportunity-cost concept is that it forces the decision...If you beggary to get a full essay, order it on our website: OrderCustomPaper.com

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