Annual opportunity cost formula

    • Chapter 01 Personal Financial Planning in Action

      The excess holding cost is $400.06 annually. The annual holding and set-up cost incurred by this policy is $520.31 + 28 = $548.31 since there is only one set-up annually. The average annual holding and set-up cost at the optimal policy is . Therefore, the annual difference = $306.91. 13. If the set up cost …

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    • [DOC File]COST SHEET - FORMAT

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      Annual sales are 60,000 units and demand accrues evenly throughout the year. The cost of ordering the product is $15 per order and the inventory cost of holding one unit of the product for one year is $3. It is Lechtal Co’s policy to have an order quantity of 1,200. What is the total annual cost to the business of trading in this product? A ...

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    • [DOC File]Chapter 8 Managing Working Capital

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      Opportunity Cost (in place of Net Capital Spending) = $110,000 - tax. Tax = 0.34 × Profit, where Profit = Market Value - Book Value. Book Value = $250,000 - 4 × 50,000 (Depreciation per year) = $50,000. Profit = $110,000 - 50,000 = $60,000 and Tax = 0.34 × $60,000 = $20,400. Opportunity Cost = $110,000 - 20,400 = $89,600. Cash Flows:

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    • [DOC File]Cost accounting

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      When calculating the present value break-even point, express the initial investment of $140,000 as an equivalent annual cost (EAC). Divide the initial investment by the seven-year annuity factor, discounted at 15 percent. The EAC incorporates the opportunity cost of the investment. EAC = Initial Investment / ATr = $140,000 / A70.15 = $33,650.45

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    • [DOC File]Chapter 1

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      1. The present value of $100 to be received 10 years from today, assuming an opportunity cost of 9 percent, is. 2. The present value of $200 to be received 10 years from today, assuming an opportunity cost of10 percent, is. 3. Colin has inherited $6,000 from …

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    • Opportunity Cost | Example, Explanation, Formula, Limitations

      12) Opportunity costs refer to money already spent. FALSE. An opportunity cost is the time, money, or resource given up when a decision is made. Bloom's: Knowledge Difficulty: Medium Learning Objective: 3 Topic: Opportunity costs 18. (p. 12) Opportunity costs refer to time, money, and other resources that are given up when a decision is made.

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    • [DOC File]CHAPTER 3

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      Feb 02, 2008 · 6) EOQ (Economic Order Quantity - Wilson’s Formula) = √2AO/C. Where A = Annual usage units. O = Ordering cost per unit. C = Annual carrying cost of one unit. i.e. Carrying cast % * Carrying cost of unit. 7) Associated cost = Buying cost pa + Carrying cost pa. 8) Under EOQ Buying cost = Carrying cost

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    • [DOC File]Problem 1:

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      2.3.2 If the future dividend per share is expected to be constant in amount, then the ex dividend share price will be calculated by the formula: So, Where is the cost of equity capital. is the annual dividend per share, starting at year 1 and then continuing annually in perpetuity. is …

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