Answer:
Opportunity cost
Explanation:
The cost that is relevant to the decision when cash does not exchange hand is called Opportunity cost which is the benefit forgone by an individual firm or investor by choosing one alternative over the other. It can be calculated by the formula
OP= Return on best forgone - return on chosen option
Investors clearly analyse investment or decisions using opportunity cost concept so as to maximizes the possible gain and reduce the benefit they stand to lose on investing in another business or making an alternate decision.
