Opportunity cost, Managerial Economics

Assignment Help:

Opportunity Cost

This is the amount that is sacrificed when choosing one activity over the next-best alternative.  In organization, an example of opportunity cost is seen in the concept of the "hurdle rate" used by financial analysts in deciding whether to pursue a particular investment project. In financial analysis, the hurdle rate is the minimum acceptable rate of return wanted to justify the investment in a capital project. If organization managers can demonstrate that a particular project would have a rate of return that is higher than this, they are in effect saying that the advantages of this project exceed the opportunity cost of using the organization funds in this project.


Related Discussions:- Opportunity cost

Compensatory financing, Compensatory Financing Two other schemes for a...

Compensatory Financing Two other schemes for alleviating the effects of commodity trade instability have been operating for a number of years.  These are the IMF's Compensator

The effect of this immigration on wages, An Economy consists of two regions...

An Economy consists of two regions, the North & the South. The short-run elasticity of labor demand in every region is -0.5. Labor supply is perfectly inelastic within both regions

Question, Calculate point elasticity of demand for demand function Q=10-2p ...

Calculate point elasticity of demand for demand function Q=10-2p for decrease in price from Rs 3 to Rs 2

What is cross price easticity of demand, For some time, two firms have char...

For some time, two firms have charged $0.90 per standard unit of crating materials for shipping a particular type of machine tool and each has been selling about 20,000 units per m

What do you mean by cost function, Q. What do you mean by Cost Function? ...

Q. What do you mean by Cost Function? Cost function is a derived function. It's derived from the production function that describes the efficient method of production at any gi

Explain managerial economics according to mote and paul, Explain Managerial...

Explain Managerial economics according to Mote and Paul Haynes, Mote and Paul:  "Managerial economics refers to those characteristics of economics and its tools of analysis mos

How pollution can make the market equilibrium inefficient, In regards to ai...

In regards to air pollution, use a diagram to show and explain how the existence of pollution can make the market equilibrium inefficient.

Mankiw model of nominal rigidities, Mankiw Model of Nominal Rigidities   ...

Mankiw Model of Nominal Rigidities   There are two related reasons for which  firms do not  frequently change prices. First, as we saw in the discussion on menu costs, the cost

Explain the theory of production, Explain the Theory of Production Co...

Explain the Theory of Production Cost and Production analysis is central for the unhampered functioning of the production process and for project planning. Production is an e

Functions or purposes of taxation, Functions or Purposes of Taxation T...

Functions or Purposes of Taxation The functions of taxation can be discussed from the activities of the government it is meant to achieve. These are: a.     Raise reven

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd