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The minimum rate of return the company must earn to be willing to make the investment. It is the rate of return the company could earn if, rather than making the capital investment, it invested the money in an alternative, but comparable, investment.
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What effect would inflation have on a company's cost of capital?
What effect would inflation have on a company's cost of capital
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
What is economic value added EVA?
Economic Value Added is the value added by management to the capital provided by shareholders. It is a period value. EVA is defined as net operating profit after tax less a capital charge reflecting the firm's cost of capital.For instance, assume a company has net operating profits after taxes of $1,000,000 for the year, Net Capital of $500,000 and cost of capital of 12%. The capital charge would be determined by multiplying the cost of capital times the net capital - in this case 12% times $500,000 for a capital charge of $60,000.The charge would be deducted from the net operating profits after taxes after taxes - $1,000,000 - $60,000. Therefore, the EVA for that year would be $940,000.
How would you describe a variable cost?
There are a number of costs that vary or change, but if the variation is not due to volume changes, it is not considered to be a variable cost.
What effect would inflation have on a company's cost of capital?
What effect would inflation have on a company's cost of capital
How would you describe the requirement of production?
Land,Labour,Physical Capital,Fixed Capital,Working Capital and Human Capital.
How do you compute the Marginal Cost of Capital schedule?
Marginal or incremental cost of capital is cost of the additional capital raised in a given period
What are the main elements in calculating cost of capital How would an increase in debt affect the cost of capital How would you identify the optimal cost of capital for an organization?
Capital is calculated by subtracting the business costs from the profits gained from products and services. An increase in debt would decrease the total capital by increasing business costs. The optimal cost of an organization is low debt and high credits.
How would you identify the optimal cost of capital for an organization?
To identify the optimal cost of capital for an organization the cost of debt and equity is needed. The preferred stock is also needed.
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
How would you describe venture capital?
Venture capital, which consists of funds raised on the capital market by specialized operators, is one of the most relevant sources of financing for innovative companies.
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
