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OBSOLESCENCE. (1) The condition of being out-of-date. A loss of value occasioned by new developments which place the older property at a competitive disadvantage. A factor in depreciation. (2) A decrease in the value of an asset brought about by the development of new and more economical methods, processes, and/or machinery. (3) The loss of usefulness or worth of a product or facility as the result of the appearance of better and/or more economical products, methods, or facilities.
OPPORTUNITY COST. The cost of not being able to use monetary funds otherwise due to that limited resource being applied to an “approved” investment alternative, and thus not being available for investment in other income-producing alternatives. Sometimes expressed as a rate.
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