Cryptocurrency Q&A
What is the rule for using opportunity cost to make decisions?
What is the rule for using opportunity cost to make decisions?
Giulia
Mon Jan 20 2025
|
6
answers
790
I'm trying to understand how opportunity cost can guide decision-making. What's the principle behind it? I want to know the rule or methodology for applying opportunity cost in choices we make.
6 answers
Eleonora
Wed Jan 22 2025
The recommended course of action is to select the project that boasts the highest Net Present Value (NPV). This metric serves as a crucial benchmark for evaluating the profitability of an investment.
Was this helpful?
195
83
Andrea
Wed Jan 22 2025
NPV takes into account the present value of all future cash flows generated by a project, discounted back to the present using a suitable discount rate.
Was this helpful?
206
66
BlockchainBaroness
Wed Jan 22 2025
While this rule generally applies, there exists an exception worth noting. If an alternative project offers a solitary and immediate benefit, this factor must be considered in the decision-making process.
Was this helpful?
103
56
Giulia
Wed Jan 22 2025
The immediate benefit, often referred to as a one-time payment or lump sum, can significantly impact the overall attractiveness of a project.
Was this helpful?
183
97
Bianca
Wed Jan 22 2025
In scenarios where one is faced with two mutually exclusive options, the principle guiding decision-making is straightforward.
Was this helpful?
49
71
Load 5 more related questions
