# Opportunity Cost

*Macro & Economy — Finicade finance glossary*

Opportunity cost is the value of the best thing you gave up to do what you did. It's the reason accounting profit and economic profit differ: a business owner who pays themselves nothing still bears the cost of the salary they could have earned elsewhere. In investing it's the discount rate — capital committed to one project cannot earn the return of another, which is why 'we already own the building' is never a reason to call space free.

**Also known as:** economic cost, next best alternative

**Related terms:** [Comparative Advantage](https://finicade.com/glossary/comparative-advantage), [Capital Budgeting](https://finicade.com/glossary/capital-budgeting), [WACC](https://finicade.com/glossary/wacc), [NPV (Net Present Value)](https://finicade.com/glossary/npv), [Discretionary Income](https://finicade.com/glossary/discretionary-income)

Source: https://finicade.com/glossary/opportunity-cost