Is there a formula for figuring out opportunity costs? If so, what is it?
Answer:
Opportunity cost is what you have to give up in order to get something else. The thing you have to give up is called the opportunity cost.
For example, if you have to give up your good pay job to start a business, your opportunity cost would be the cost of losing your job and salary. Had you not giving up you job, you would still be earning a salary. Would that make sense to you?
If I had the formula, do you think I'll pass it on to you??
Opportunity costs are straightforward, you simply need to figure out how much it would cost and/or how much money or income it you would make on both sides of the decision including all aspects, salary, expense, parking, ammenities, gas, tuitions, whatever is applicable and compare. For financial calcualtions, the WACC calcualation can be considered related especially if you are discussing stock costs take a look at the following sight. Hope this helps.
http://www.valuepro.net/approach/wacc/wa.
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