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net cost of normal spoilage |
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Definition of net cost of normal spoilagenet cost of normal spoilagethe cost of spoiled work less the estimated disposal value of that work
Related Terms:CARs (cumulative abnormal returns)a measure used in academic finance articles to measure the excess returns an investor would have received over a particular time period if he or she were invested in a particular stock. NPV (net present value of cash flows)Same as PV, but usually includes a subtraction for an initial cash outlay. Abnormal returnsPart of the return that is not due to systematic influences (market wide influences). In Accelerated cost recovery system (ACRS)Schedule of depreciation rates allowed for tax purposes. Agency cost viewThe argument that specifies that the various agency costs create a complex environment in Agency costsThe incremental costs of having an agent make decisions for a principal. All-in costTotal costs, explicit and implicit. Average cost of capitalA firm's required payout to the bondholders and to the stockholders expressed as a Bankruptcy cost viewThe argument that expected indirect and direct bankruptcy costs offset the other Carring costscosts that increase with increases in the level of investment in current assets. Cost company arrangementArrangement whereby the shareholders of a project receive output free of Cost of capitalThe required return for a capital budgeting project. Cost of carryRelated: net financing cost Cost of fundsInterest rate associated with borrowing money. Cost of lease financingA lease's internal rate of return. Cost of limited partner capitalThe discount rate that equates the after-tax inflows with outflows for capital Cost-benefit ratioThe net present value of an investment divided by the investment's initial cost. Also called Cumulative abnormal return (CAR)Sum of the differences between the expected return on a stock and the Equivalent annual costThe equivalent cost per year of owning an asset over its entire life. European Monetary System (EMS)An exchange arrangement formed in 1979 that involves the currencies Execution costsThe difference between the execution price of a security and the price that would have Exposure nettingOffsetting exposures in one currency with exposures in the same or another currency, Financial distress costsLegal and administrative costs of liquidation or reorganization. Also includes Firm's net value of debtTotal firm value minus total firm debt. Fixed costA cost that is fixed in total for a given period of time and for given production levels. Friction costscosts, both implied and direct, associated with a transaction. Such costs include time, effort, Incremental costs and benefitscosts and benefits that would occur if a particular course of action were Information costsTransaction costs that include the assessment of the investment merits of a financial asset. International Monetary FundAn organization founded in 1944 to oversee exchange arrangements of International Monetary Market (IMM)A division of the CME established in 1972 for trading financial Lognormal distributionA distribution where the logarithm of the variable follows a normal distribution. Market impact costsAlso called price impact costs, the result of a bid/ask spread and a dealer's price concession. Market timing costscosts that arise from price movement of the stock during the time of the transaction Monetary goldGold held by governmental authorities as a financial asset. Monetary policyActions taken by the Board of Governors of the Federal Reserve System to influence the Monetary / non-monetary methodUnder this translation method, monetary items (e.g. cash, accounts Net adjusted present valueThe adjusted present value minus the initial cost of an investment. Net advantage of refundingThe net present value of the savings from a refunding. Net advantage to leasingThe net present value of entering into a lease financing arrangement rather than Net advantage to mergingThe difference in total post- and pre-merger market value minus the cost of the merger. Net asset value (NAV)The value of a fund's investments. For a mutual fund, the net asset value per share Net assetsThe difference between total assets on the one hand and current liabilities and noncapitalized longterm Net benefit to leverage factorA linear approximation of a factor, T*, that enables one to operationalize the Net book valueThe current book value of an asset or liability; that is, its original book value net of any Net cash balanceBeginning cash balance plus cash receipts minus cash disbursements. Net changeThis is the difference between a day's last trade and the previous day's last trade. Net errors and omissionsIn balance of payments accounting, net errors and omissions record the statistical Net financing costAlso called the cost of carry or, simply, carry, the difference between the cost of financing Net floatSum of disbursement float and collection float. Net incomeThe company's total earnings, reflecting revenues adjusted for costs of doing business, Net investmentGross, or total, investment minus depreciation. Net leaseA lease arrangement under which the lessee is responsible for all property taxes, maintenance Net operating lossesLosses that a firm can take advantage of to reduce taxes. Net operating marginThe ratio of net operating income to net sales. Net periodThe period of time between the end of the discount period and the date payment is due. Net present value (NPV)The present value of the expected future cash flows minus the cost. Net present value of growth opportunitiesA model valuing a firm in which net present value of new Net present value of future investmentsThe present value of the total sum of NPVs expected to result from Net present value ruleAn investment is worth making if it has a positive NPV. Projects with negative NPVs Net profit marginnet income divided by sales; the amount of each sales dollar left over after all expenses Net salvage valueThe after-tax net cash flow for terminating the project. Net working capitalCurrent assets minus current liabilities. Often simply referred to as working capital. Net worthCommon stockholders' equity which consists of common stock, surplus, and retained earnings. NettingReducing transfers of funds between subsidiaries or separate companies to a net amount. Netting outTo get or bring in as a net; to clear as profit. Normal annuity formThe manner in which retirement benefits are paid out. Normal backwardation theoryHolds that the futures price will be bid down to a level below the expected Normal deviateRelated: standardized value Normal probability distributionA probability distribution for a continuous random variable that is forms a Normal portfolioA customized benchmark that includes all the securities from which a manager normally Normal random variableA random variable that has a normal probability distribution. Normalizing methodThe practice of making a charge in the income account equivalent to the tax savings Opportunity cost of capitalExpected return that is foregone by investing in a project rather than in Opportunity costsThe difference in the performance of an actual investment and a desired investment Payments nettingReducing fund transfers between affiliates to only a netted amount. netting can be done on Price impact costsRelated: market impact costs Replacement costcost to replace a firm's assets. Round-trip transactions costscosts of completing a transaction, including commissions, market impact Safety-net returnThe minimum available return that will trigger an immunization strategy in a contingent Search costscosts associated with locating a counterparty to a trade, including explicit costs (such as Shortage costcosts that fall with increases in the level of investment in current assets. SIMEX (Singapore International Monetary Exchange)A leading futures and options exchange in Singapore. Standardized normal distributionA normal distribution with a mean of 0 and a standard deviation of 1. Sunk costscosts that have been incurred and cannot be reversed. Trading costscosts of buying and selling marketable securities and borrowing. Trading costs include Transactions costsThe time, effort, and money necessary, including such things as commission fees and the True interest costFor a security such as commercial paper that is sold on a discount basis, the coupon rate Variable costA cost that is directly proportional to the volume of output produced. When production is zero, Weighted average cost of capitalExpected return on a portfolio of all the firm's securities. Used as a hurdle Cost basisAn assetâ€™s purchase price, plus costs associated with the purchase, like installation fees, taxes, etc. Cost of goods soldThe cost of merchandise that a company sold this year. For manufacturing companies, the cost of raw MACRS (Modified Accelerated Cost Recovery System)A depreciation method created by the IRS under the Tax Reform Act of 1986. Companies must use it to depreciate all plant and equipment assets installed after December 31, 1986 (for tax purposes). NET INCOMEThe profit a company makes after cost of goods sold, expenses, and taxes are subtracted from net sales. NET SALES (revenue)The amount sold after customersâ€™ returns, sales discounts, and other allowances are taken away from RATIO OF NET INCOME TO NET SALESA ratio that shows how much net income (profit) a company made on each dollar of net sales. Hereâ€™s the formula: RATIO OF NET SALES TO NET INCOMEA ratio that shows how much a company had to collect in net sales to make a dollar of profit. Figure it this way: Absorption costingA method of costing in which all fixed and variable production costs are charged to products or services using an allocation base. Activity-based costingA 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. Avoidable costscosts that are identifiable with and able to be influenced by decisions made at the business
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