Accounting Costs Include Both Explicit and Implicit Costs

question 36

True/False

Accounting costs include both explicit and implicit costs.

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Definitions:

Intrinsic Value

The actual, fundamental worth of an asset, as opposed to its market price or book value.

WACC

Weighted Average Cost of Capital, a measure of a company's cost of capital in which each category of capital is proportionately weighted.

Valuation Model

A framework or methodology used to determine the fair value of an asset, business, or investment based on its fundamentals and future earning potential.

FCFE

Free Cash Flow to Equity (FCFE) is the amount of cash available for distribution to shareholders after all expenses, reinvestment, and debt payments have been made.