Money · RATIOXA GLOSSARY
Opportunity cost
Benefit of the best realistic alternative given up by choosing an option.
Simple definition
Benefit of the best realistic alternative given up by choosing an option.
Why it matters
This term changes how inputs, cash flows or results should be interpreted. RATIOXA keeps it explicit so two options are compared on the same basis.
Worked example
Cash used for a purchase cannot remain invested; the foregone net return is an opportunity-cost assumption.