Time Value of Money, Opportunity Cost

/in /by

Time Value of Money, Opportunity Cost, and Income Taxes

In , the opportunity cost, or alternative cost, of making a particular choice is the  of the most valuable  out of those that were not taken. When an option is chosen from alternatives, the opportunity cost is the “cost” incurred by not enjoying the benefit associated with the best alternative choice. The  defines it as “the loss of potential gain from other alternatives when one alternative is chosen.” In simple terms, opportunity cost is the benefit foregone from the next best alternative that is not selected. Opportunity cost is a key concept in , and has been described as expressing “the basic relationship between  and “.  The notion of opportunity cost plays a crucial part in attempts to ensure that scarce resources are used efficiently. Opportunity costs are not restricted to  or financial costs: the  of , lost time, pleasure or any other benefit that provides  should also be considered an opportunity cost. The opportunity cost of a  or  is the  that could be earned by its alternative use. In other words, opportunity cost is the cost of the next best alternative of a product or service. The meaning of the concept of opportunity cost can be explained with the help of following examples:

(1) The opportunity cost of the funds tied up in the one’s own business is the interest (or profits corrected for differences in risk) that could be earned on those funds in other ventures.

(2) The opportunity cost of the time one puts into his own business is the salary he could earn in other occupations (with a correction for the relative psychic income in the two occupations).

(3) The opportunity cost of using a machine to produce one product is the earnings that would be possible from other products.

(4) The opportunity cost of using a machine that is useless for any other purpose is nil, since its use requires no sacrifice of other opportunities.

Thus opportunity cost requires sacrifices. If there is no sacrifice involved in a decision, there will be no opportunity cost. In this regard the opportunity costs not involving  are not recorded in the books of accounts, but they are important considerations in business decisions.

 

Everyday we choose one financial decision over another. Should we buy a cup of coffee or should we save that money? What is the personal and financial cost to us? In this assignment you determine the time value of money and examine opportunity cost, among other fundamentals of economics and finance.

Review your Week 2 Learning Activities.

Complete the .

ADDITIONAL INSTRUCTIONS FOR THE CLASS

Discussion Questions (DQ)

  • Initial responses to the DQ should address all components of the questions asked, include a minimum of one scholarly source, and be at least 250 words.
  • Successful responses are substantive (i.e., add something new to the discussion, engage others in the discussion, well-developed idea) and include at least one scholarly source.
  • One or two sentence responses, simple statements of agreement or “good post,” and responses that are off-topic will not count as substantive. Substantive responses should be at least 150 words.
  • I encourage you to incorporate the readings from the week (as applicable) into your responses.

Weekly Participation

  • Your initial responses to the mandatory DQ do not count toward participation and are graded separately.
  • In addition to the DQ responses, you must post at least one reply to peers (or me) on three separate days, for a total of three replies.
  • Participation posts do not require a scholarly source/citation (unless you cite someone else’s work).
  • Part of your weekly participation includes viewing the weekly announcement and attesting to watching it in the comments. These announcements are made to ensure you understand everything that is due during the week.

APA Format and Writing Quality

  • Familiarize yourself with APA format and practice using it correctly. It is used for most writing assignments for your degree. Visit the Writing Center in the Student Success Center, under the Resources tab in LoudCloud for APA paper templates, citation examples, tips, etc. Points will be deducted for poor use of APA format or absence of APA format (if required).
  • Cite all sources of information! When in doubt, cite the source. Paraphrasing also requires a citation.
  • I highly recommend using the APA Publication Manual, 6th edition.

Use of Direct Quotes

  • I discourage overutilization of direct quotes in DQs and assignments at the Masters’ level and deduct points accordingly.
  • As Masters’ level students, it is important that you be able to critically analyze and interpret information from journal articles and other resources. Simply restating someone else’s words does not demonstrate an understanding of the content or critical analysis of the content.
  • It is best to paraphrase content and cite your source.

 

LopesWrite Policy

  • For assignments that need to be submitted to LopesWrite, please be sure you have received your report and Similarity Index (SI) percentage BEFORE you do a “final submit” to me.
  • Once you have received your report, please review it. This report will show you grammatical, punctuation, and spelling errors that can easily be fixed. Take the extra few minutes to review instead of getting counted off for these mistakes.
  • Review your similarities. Did you forget to cite something? Did you not paraphrase well enough? Is your paper made up of someone else’s thoughts more than your own?
  • Visit the Writing Center in the Student Success Center, under the Resources tab in LoudCloud for tips on improving your paper and SI score.

Late Policy

  • The university’s policy on late assignments is 10% penalty PER DAY LATE. This also applies to late DQ replies.
  • Please communicate with me if you anticipate having to submit an assignment late. I am happy to be flexible, with advance notice. We may be able to work out an extension based on extenuating circumstances.
  • If you do not communicate with me before submitting an assignment late, the GCU late policy will be in effect.
  • I do not accept assignments that are two or more weeks late unless we have worked out an extension.
  • As per policy, no assignments are accepted after the last day of class. Any assignment submitted after midnight on the last day of class will not be accepted for grading.

Communication

  • Communication is so very important. There are multiple ways to communicate with me: 
    • Questions to Instructor Forum: This is a great place to ask course content or assignment questions. If you have a question, there is a good chance one of your peers does as well. This is a public forum for the class.
    • Individual Forum: This is a private forum to ask me questions or send me messages. This will be checked at least once every 24 hours.

 

 

 

📚 Need a custom-written assignment from scratch?
Our expert academic writers deliver top-quality, 100% plagiarism-free work that guarantees an A+ grade.

✅ First assignment absolutely FREE!
Use code FREE at checkout for a 100% discount.

Note: We never resell papers. Every order is uniquely crafted just for you.

Get Your Free Assignment