OCC (Opportunity Cost of Capital)

The expected return from investments missed in favor of other investments. Opportunity Cost of Capital is calculated by comparing various investment alternatives, their capital costs, and the value they may return. Companies usually choose the highest profit per investment ratio (if all other factors, such as risk, are equal). Some components are not, traditionally, calculated in OCC but, perhaps, should be. These include: the costs of an investment... Read More

Present Value (PV)

An assessment of the “real” value of a future investment or financial transaction in terms of present economic value (as opposed to the actual value of the investment or transaction when it occurs).  Read More