Cost

From ACT Wiki
Revision as of 16:58, 30 July 2017 by imported>Doug Williamson (Expand for opportunity cost.)
Jump to navigationJump to search

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.


See also