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Are depreciation charges implicit cost?
yes, depreciation is an implicit cost. but this implicit cost is added to total costs in calculating accounting profits.
Why accounting profit is higher than economic profit?
First of all, we need to understand what is explicit cost and implicit cost. Explicit cost mean real expenses, while implicit cost mean opportunity cost. In accounting profit, we only minus explicit cost, while in economic profit we minus explicit cost and implicit cost. therefore accounting profit is higher than economic profit.
Why do economists bother with implicit cost?
Because opportunity cost doesn't show up as an accounting expense.
What is the concept of marginal cost of capital?
The marginal cost of capital (MCC) is the cost of the last dollar of capital raised, essentially the cost of another unit of capital raised. As more capital is raised, the marginal cost of capital rises.
What are the various concept of cost of capital?
concepts of cost of capital
Are depreciation charges implicit cost?
yes, depreciation is an implicit cost. but this implicit cost is added to total costs in calculating accounting profits.
Difference between imputed and implicit cost?
According to the "Bible" for accounting terminology, Barron's Dictionary of Accounting Terms, 5th Edition, they are the same. In fact, when you look up implicit cost, it refers you to imputed cost. This is the definition of imputed cost: "A cost that is implied but not reflected in the financial reports of the firm: also called implicit cost. Imputed costs consist of opportunity costs of time and capital that the manage has invested in producing the given quantity of production and the opportunity costs of making a particular choice among the alternatives being considered."
1 Explicit cost and Implicit cost are the two dimensions of cost What role does cost play in financial decisions?
Explicit cost and Implicit cost are the two dimensions of cost What role does cost play in financial decisions?
Example of implicit cost?
There is almost an implicit assumption that tutors know about these things.
Why accounting profit is higher than economic profit?
First of all, we need to understand what is explicit cost and implicit cost. Explicit cost mean real expenses, while implicit cost mean opportunity cost. In accounting profit, we only minus explicit cost, while in economic profit we minus explicit cost and implicit cost. therefore accounting profit is higher than economic profit.
Why do economists bother with implicit cost?
Because opportunity cost doesn't show up as an accounting expense.
What do you understand by cost of capital?
cost of capital
What is the meaning of capital cost?
what is capital cost
What is the concept of marginal cost of capital?
The marginal cost of capital (MCC) is the cost of the last dollar of capital raised, essentially the cost of another unit of capital raised. As more capital is raised, the marginal cost of capital rises.
Is capital a fixed cost?
capital is a fixed cost
What are the various concept of cost of capital?
concepts of cost of capital
Why is Weighted Average Cost of Capital important to an organization?
imoportant of capital cost to a hotel imoportant of capital cost to a hotel
