Out-of-pocket and opportunity costs applied to finances
Not what you're looking for?
Accounting: Concepts & Applications, by Albrecht. Problem: Chapter 15: Discussion question
How can out-of-pocket costs and opportunity costs be applied to your personal financial decisions?
Purchase this Solution
Solution Summary
The solution explains both concepts together with three personal examples for a better understanding of opportunity costs.
Solution Preview
Out of pocket costs refer to money actually paid or spent for a service or product. It simply means that money is gone out of your pocket, whether cash, check, debit card or credit card.
Opportunity cost, on the other hand, is a cost you didn't pay but that which you would have paid if you had selected a second option for a product or service. Said differently, it is the cost of passing up the next best choice. It is a comparison of what you did as opposed to what you could have done with the same resources ...
Purchase this Solution
Free BrainMass Quizzes
Academic Reading and Writing: Critical Thinking
Importance of Critical Thinking
Production and cost theory
Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.
Paradigms and Frameworks of Management Research
This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.
Social Media: Pinterest
This quiz introduces basic concepts of Pinterest social media
Transformational Leadership
This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.