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The Process of Dividing a Total Cost into Parts and Assigning

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The process of dividing a total cost into parts and assigning it to cost objects is known as:


Definitions:

Sunk Cost

Costs that have already been incurred and cannot be recovered, and thus should not influence current/future business decisions.

Capital Budgeting

The process a business undertakes to evaluate potential major projects or investments, focusing on analyzing future cash flows and profitability.

Discount Rate

The yield rate utilized within DCF analysis for determining today's value of future cash movements.

Opportunity Costs

The financial impact of bypassing the alternative that ranks immediately lower in preference while making a choice.

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