Identify the alternatives
Determine the benefits and costs of each alternative
Compare the net value of the next best alternative
Subtract the value of the chosen option from the value of the forgone option
Use the formula: Opportunity Cost = Value of Best Forgone Alternative – Value of Chosen Option
Include both explicit and implicit costs
Consider time, money, and other resources used
Account for non-financial factors if relevant
Choose the option with the highest net benefit
Reevaluate if conditions or assumptions change