Operating and Financial Review and Opportunity cost: Difference between pages

Revision as of 16:47, 10 February 2017

The expected return that is foregone by investing in a project, rather than in the next best use of capital or other resources.

It is the opportunity cost of capital and other resources that is the relevant economic measure for financial decision making purposes.

Opportunity cost is an important and powerful concept in cash management.

Examples of opportunity costs include leaving cash in a non-interest bearing bank account.

The organisation loses the opportunity to pay down debt (and save interest) or to invest the cash elsewhere (and earn interest).

@@ Line 1: / Line 1: @@
-(OFR).
+The expected return that is foregone by investing in a project, rather than in the next best use of capital or other resources.
-''Financial reporting''.
+It is the opportunity cost of capital and other resources that is the relevant economic measure for financial decision making purposes.
-The OFR described the performance and development of the company and was intended to aid third parties to assess its strategy.
-It was a mandatory legal requirement in the annual reports of UK companies.
-This requirement has now been superseded by the Strategic Report.
+Opportunity cost is an important and powerful concept in cash management.
+Examples of opportunity costs include leaving cash in a non-interest bearing bank account.
+The organisation loses the opportunity to pay down debt (and save interest) or to invest the cash elsewhere (and earn interest).
 == See also ==
-*[[Annual report]]
+* [[Cost of capital]]
-*[[Strategic Report]]
+* [[Opportunity cost of capital]]
+* [[Production possibility curves]]
-[[Category:Accounting,_tax_and_regulation]]
+* [[Supernormal profit]]