Measuring opportunity cost of capital

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Opportunity Cost: What Is It and How to Calculate It

 

What is the opportunity cost of capital? How can a company measure opportunity cost of capital for a project that is considered to have average risk?

 

Sample Solution

Opportunity cost of capital is the difference in return between preferred investment and the forfeited one. This is often observed in securities trading or in other decisions. For example, an investor with $10,000 to invest may be confronted with two stocks A and B. Opportunity cost in this case is the difference in their returns. If that person invested $10,000 in Stock A and received a 5% return while Stock B makes a 7% return, the opportunity cost is 2%. One way of hypothesizing opportunity cost is as the amount of money one could have made by making a different investment decision. Importantly, opportunity cost is not a type of risk because there is not a chance of actual loss.

it is also reasonable to look at the different categories and their definitions, start with the first category laboratory services.
Weatherford laboratories deliver a set of basic core analysis services with a whole necessity test required to help the costumer more in improving reservoir estimates, recover their reservoir forming, also identify and correct any damage to the formation of the reservoir.

Moreover the advanced tests provided by the Weatherford labs are particularly designed to evaluate different properties such as Petrophysics, Fluid Flow Properties, Rock Mechanics, Enhanced Oil Recovery, and others.
The second category is about reservoir solutions, this category generally discuss about the oilfield challenges and the solution that the company offer to the clients for several difficulties that the operators faced.
Coming to third category surface logging system, is mostly talking about the extraction of fluids from the underground and determining the amount of sufficient gases present in the reservoir by means of specific measurements and Techniques. Inadequate fluid extraction or using unsuitable devices can cause an error in the measurements also reduce the accuracy of the analysis.
Nevertheless, Weatherford Company also offers to the operator’s wireline services, the wireline services include all the advance and important information about the well. Likewise wireline fulfil all the client needs with unequalled flexibility and with integrated strategic wireline technologies, tools, and systems.

 

 

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In addition, completion and stimulation is also one of the essential services provided by Weatherford Company. To achieve a high quality production of the well it is important to perform critical treatments and upgrades efficiently. This requires a careful preparation and extensive capability.
Consequently, Weatherford delivers a complete facilities, breadth, and experience in multi subjects whether on the surface or down the well, in laboratories or factories. The company focus is to deliver a high quality services in the industry.

Weatherford labs

Weatherford Laboratories are involved in rock and fluid analysis by providing several services related to oil and gas production around the world. Weatherford labs has wide experience in working with different type of fluids and reservoir which play an important role for oil and gas producers. In addition, this experience leads the company to reach determinations on the best production for the long-term viability of a well.

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