|equivalent annual cost|
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Definition of equivalent annual cost
equivalent annual cost
The cost per period with the same present value as the cost of buying and operating a machine.
Equivalent annual cost
The equivalent cost per year of owning an asset over its entire life.
A method of costing in which all fixed and variable production costs are charged to products or services using an allocation base.
a cost accumulation and reporting
A methodology under which all manufacturing costs are assigned
Schedule of depreciation rates allowed for tax purposes.
A method of costing that uses cost pools to accumulate the cost of significant business activities and then assigns the costs from the cost pools to products or services based on cost drivers.
A relatively new method advocated for the
a process using multiple cost drivers to predict and allocate costs to products and services;
A cost allocation system that compiles costs and assigns
The actual expenditure made to acquire an asset, which includes the supplierinvoiced
a valuation method that uses actual direct
The argument that specifies that the various agency costs create a complex environment in
The incremental costs of having an agent make decisions for a principal.
cost capitalization that stretches the flexibility within generally
Total costs, explicit and implicit.
cost of a security adjusted for the amortization of any purchase premium or
Annual fund operating expenses
For investment companies, the management fee and "other expenses,"
Annual percentage rate (APR)
The periodic rate times the number of periods in a year. For example, a 5%
annual percentage rate (APR)
Interest rate that is annualized using simple interest.
Annual percentage yield (APY)
The effective, or true, annual rate of return. The APY is the rate actually
Yearly amount payable by a client for a policy or component.
Yearly record of a publicly held company's financial condition. It includes a description of the
The report required by the Stock Exchange for all listed companies, containing the company’s financial statements.
A report issued to a company’s shareholders, creditors, and regulatory
The fund return, for any 12-month period, including changes in unit value and the reinvestment of distributions, but not taking into account sales, redemption, distribution or other optional charges or income taxes payable by any unitholder that would reduce returns.
If stock X appreciates 1.5% in one month, the annualized gain for that sock over a twelve
Annualized holding period return
The annual rate of return that when compounded t times, would have
a quality control cost incurred for monitoring
attribute-based costing (ABC II)
an extension of activitybased costing using cost-benefit analysis (based on increased customer utility) to choose the product attribute
Average-Cost Inventory Method
The inventory cost-flow assumption that assigns the average
Average cost of capital
A firm's required payout to the bondholders and to the stockholders expressed as a
costs that are identifiable with and able to be influenced by decisions made at the business
a streamlined cost accounting method that speeds up, simplifies, and reduces accounting effort in an environment that minimizes inventory balances, requires
Bankruptcy cost view
The argument that expected indirect and direct bankruptcy costs offset the other
A cost that is incurred when a group of products or services are produced,
a cost that is caused by a group of things
The method used for computing the bond-equivalent yield.
Bond equivalent yield
Bond yield calculated on an annual percentage rate method. Differs from annual
The annualized yield to maturity computed by doubling the semiannual yield.
Bond Equivalent Yield
Bond yield calculated on an annual percentage rate method
a planned expenditure
Capital Cost Allowance (CCA)
The annual depreciation expense allowed by the Canadian Income Tax Act.
capitalization of costs
When a cost is recorded originally as an increase
Capitalized Cost An expenditure or accrual that is reported as an asset to be amortized against
costs that increase with increases in the level of investment in current assets.
the total variable cost of carrying one unit of
The cost of holding inventory, which can include insurance,
costs of maintaining current assets, including opportunity cost of capital.
CASH AND CASH EQUIVALENTS
The balance in a company’s checking account(s) plus short-term or temporary investments (sometimes called “marketable securities”), which are highly liquid.
Cash and equivalents
The value of assets that can be converted into cash immediately, as reported by a
The amount of cash expended.
A short-term security that is sufficiently liquid that it may be considered the financial
Temporary investments of currently excess cash in short-term, high-quality
Highly liquid, fixed-income investments with original maturities of three months or less.
Instruments or investments of such high liquidity and safety that they are virtually equal to cash.
An amount that would be accepted in lieu of a chance at a possible higher, but
a cost related either to the long-term investment
Common stock equivalent
A convertible security that is traded like an equity issue because the optioned
company cost of capital
Expected rate of return demanded by investors in a company, determined by the average risk of the company’s assets and operations.
a cost over which a manager has the ability to authorize incurrence or directly influence magnitude
Refers to the sum of manufacturing direct labor and overhead
the total of direct labor and overhead cost;
Corporate taxable equivalent
Rate of return required on a par bond to produce the same after-tax yield to
A resource sacrificed or forgone to achieve a specific objective (Horngren et al.), defined
the cash or cash equivalent value necessary to attain an
The expense incurred to create and sell a product or service. If a product is not
a discipline that focuses on techniques or
Cost Accounting Standards Board (CASB)
a body established by Congress in 1970 to promulgate cost accounting
the approach to product costing that determines
the assignment, using some reasonable basis,
the practice of finding acceptable alternatives
An asset’s purchase price, plus costs associated with the purchase, like installation fees, taxes, etc.
The idea that fixed costs and variable costs react differently to changes in the volume of
The calculation and comparison of the costs and benefits of a policy or project.
cost-benefit analysis the analytical process of comparing the
relative costs and benefits that result from a specific course
The net present value of an investment divided by the investment's initial cost. Also called
a responsibility center in which the manager has
A division or unit of an organization that is responsible for controlling costs.
Cost company arrangement
Arrangement whereby the shareholders of a project receive output free of
a company-wide attitude about the topics
the practice of minimizing, to the extent
The process of either reducing costs while maintaining the same level of productivity or maintaining costs while increasing productivity.
cost control system
a logical structure of formal and/or informal
A method of expensing the cost of a resource consumed by first determining
The most significant cause of the cost of an activity, a measure of the demand for an activity
a factor that has a direct cause-effect relationship
A factor that directly impacts the incidence of a cost, and which is generally
cost driver analysis
the process of investigating, quantifying,
cost leadership strategy
a plan to achieve the position in a
cost management system (CMS)
a set of formal methods
Anything for which a measurement of cost is required – inputs, processes, outputs or responsibility centres.
An item for which a cost is compiled. For example, this can be a product,
Cost of capital
The required return for a capital budgeting project.
Cost of capital
The costs incurred by an organization to fund all its investments, comprising the risk-adjusted
cost of capital
Refers to the interest cost of debt capital used by a business
Cost of Capital
The minimum rate of return a company must earn in order to meet
Cost of capital
The blended cost of a company’s currently outstanding debt instruments
Cost of Capital
The discount rate that should be used in the capital budgeting process.
cost of capital (COC)
the weighted average cost of the
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