Classification of the cost, Financial Management

Assignment Help:

1) Future cost and historical cost: financial decision is based on the future cost and not on the historical cost. The decision related to the future and hence the cost are likely to be incurred in furthered costs.

2) Specific cost and composite costs: the cost of individual source of the capital of all the sources combined in the terms as composite cost or overall cost. It is thus the weighted cost thus. the cost of debenture and preference shares equity shares and retained earnings is to be secretly calculated first and then combined cost can be computed since the combined cost consider the quantum of the financing through each cost the cost is known as the weighted cost. It is this overall which is the important in the evaluating of a firm as on ongoing entity. The composite cost of capital is the cost which is to be considering while the evaluating capital project also. In case only one source of financing is to be used for the investment proposal the specific cost of that source of that funds may be consider but in a capital structure decision, it is always the weighted cost of capital that is significant.


Related Discussions:- Classification of the cost

Certificate of deposits, A Certificate of Deposit (CD) can be defined...

A Certificate of Deposit (CD) can be defined as a negotiable promissory note, secure and short-term in nature. CDs are issued at a discount to the face value, the

Types and causes of unemployment, Question 1: (a) Discuss the main limi...

Question 1: (a) Discuss the main limitations of using changes in national income as an index of economic welfare. (b) What are the alternatives measures and issues that sho

Approximating the percentage price change using duration, Let us expr...

Let us express the process of calculating approximate percentage price change for a given change in yield and a given duration using the following formula:

Describes the concept of time value of money, Q. Describes the Concept of T...

Q. Describes the Concept of Time value of Money? 'Time value of money' signifies that the value of a unit of money is different in different time periods. The worth of a sum of

Cash flows vs accounting profits, Do you provide assignment help on Cash Fl...

Do you provide assignment help on Cash Flows Vs Accounting Profits. Do you have experts in this topic? Please suggest me if you can give me help with this topic.

Calculate the total present value of the tax shield, Nortel is considering ...

Nortel is considering the purchase of a new  call routing system.  The system will cost $50M to purchase, an additional $7M to install, and will last for 30 years.  The CCA rate as

Employees’ provident fund, Employees' Provident Fund (EPF) The Employee...

Employees' Provident Fund (EPF) The Employees' Provident Fund (EPF) Act, 1952 is the earliest legislation related to old age income security in India. It is a contributory prov

What do you mean by shares, Q. What do you mean by Shares? Shares: issu...

Q. What do you mean by Shares? Shares: issue of the share is the most important source of the long terms capital. A company can issue various type of the share as the equity an

What are assumptions of walters dividend model, Q. What are assumptions of ...

Q. What are assumptions of Walters dividend model? 1. Constant Return and Cost of Capital: - The Walter' model presume that the firm's rate of return and its cost of capital ar

Treasury bills, T-Bills are issued to enable the government to tide o...

T-Bills are issued to enable the government to tide over short-term liquidity requirements with maturities varying from a fortnight to a year. These instruments a

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd