标题: Do you include opportunity cost of the capital investment wh [打印本页] 作者: spreads 时间: 2013-4-12 22:03 标题: Do you include opportunity cost of the capital investment wh
Lets say you buy a building for $500,000 and there is $250,000 of opportunity cost that is included when you figure out the total initial outlay. When you depreciate the asset each year is depreciation based on the $500,000 or $750,000?作者: anshultongia 时间: 2013-4-12 22:03
To my knowledge, Opportunity Costs are never accounted for in Financial Accounting. Hence, will not be included for depreciation as well.
However, the returns you get on your equity of $500,000, would be your cost of equity. You could subtract your opportunity cost of capital from there to get your Economic Profit.
