Cost: Difference between revisions
imported>Doug Williamson (Expand for opportunity cost.) |
imported>Doug Williamson (Layout.) |
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''Accounting | ''Accounting'' | ||
The expenses payable to produce the firm’s sales. | The expenses payable to produce the firm’s sales. | ||
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''Accounting | ''Accounting'' | ||
In relation to fixed assets, the original cost of acquisition. | In relation to fixed assets, the original cost of acquisition. | ||
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''Financial decision making | ''Financial decision making'' | ||
In financial decision making cost is the expected return or benefit that is foregone by investing in a project, rather than in the next best use of capital or other resources. | In financial decision making cost is the expected return or benefit that is foregone by investing in a project, rather than in the next best use of capital or other resources. | ||
Revision as of 16:58, 30 July 2017
1.
Accounting
The expenses payable to produce the firm’s sales.
2.
Accounting
In relation to fixed assets, the original cost of acquisition.
The net book value of fixed assets, in simple terms, is the difference between cost and accumulated depreciation.
3.
Financial decision making
In financial decision making cost is the expected return or benefit that is foregone by investing in a project, rather than in the next best use of capital or other resources.
This type of cost is often known as the 'opportunity cost'.
It is the opportunity cost of capital and of other resources that is the relevant economic measure for financial decision making purposes.
4.
To estimate the price of something.
5.
More generally, the amount paid to acquire or buy something.
