Opportunity cost of some activity is the gain foregone from the second-best alternative activity. For example, you have Rs. 10000 which you decide to invest in your family business. What is the opportunity cost of your action? If you do not invest this money, you can either keep it in the house safe which will give you zero return or you can deposit it in either bank A or bank B in which case you get an rest at the rate of 20% or 10%, respectively.
So the maximum benefit that you may get from other alternative activities is the interest from the bank A. But this Opportunity will no longer be there once you invest the money in your family business. The opportunity cost of investing the money in your family business is, therefore, the amount of forgone interest from the bank A.
