Opportunity Cost in Finance and Accounting

(Hardback)

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The concept of opportunity cost, an integral part of classical economic theory, is more than 200 years old, yet it is still not fully understood today. This work focuses on opportunity cost as it affects decision making, managing and business problem-solving - where the acceptance of one alternative precludes the acceptance of others. H.G.Heymann and Robert Bloom clarify the issues associated with the opportunity cost principle, the measurement of opportunity costs and its practical applications in the areas of finance and accounting. The authors begin their work with simple examples that relate to the opportunity cost principle and introduce the framework in which it has been defined. Following a discussion of basic concepts, applications in economic theory, finance and accounting are reviewed and analyzed, and increasingly complex, multidimensional and interdependent problem statements are considered in relation to practical management procedures. The book's interdisciplinary approach addresses a number of issues related to opportunity cost, including the environment in which theories, models and concepts are developed; the multiple dimensions of problem situations faced by practising managers; various interpretations of opportunity cost in economic theory and the relevance of opportunity cost in computer-aided decision support systems. Written in a way that even people with a minimum background in economics can understand, "Opportunity Cost in Finance and Accounting" hopes to enhance the reader's appreciation of the many complex issues that relate to organizational management, financial decision-making, valuation and opportunity costs.

Author Bio

H.G. HEYMANN is Associate Professor of Finance at Indiana University Northwest, Gary, Indiana. ROBERT BLOOM is Professor of Accounting at John Carroll University in Cleveland, Ohio. Among Bloom and Heymann's previous books is Decision Support Systems in Finance and Accounting (Quorum, 1988).