Define Period Cost

question 182

Essay

Define period cost.Give three examples of period costs of a merchandising company.

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Definitions:

Time Value of Money

The belief that possessing money in the present is worth more than holding the same amount later on because it has the potential to increase in value.

Capital Budgeting Methods

Techniques used by companies to evaluate the desirability of investments or expenditures. Major methods include net present value (NPV), internal rate of return (IRR), and payback period.

Accounting Rate of Return

A measure of the return expected on an investment, calculated by dividing the average annual profit by the initial investment cost.

After-Tax Net Income

The amount of profit a company remains with after all tax expenses have been deducted from its total income.