An _____________________ Cost Requires the Future Outlay of Cash and Is

question 190

Essay

An _____________________ cost requires the future outlay of cash and is relevant for decision making.

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Definitions:

Salvage Value

The expected market value an asset will achieve when it is disposed of after its life cycle.

Payback Period

The length of time it takes for an investment to recover its initial cost out of the cash inflows that it generates.

Simple Rate of Return

A method of investment appraisal that calculates the annual incremental net operating income as a percentage of the initial investment.

Cash Operating Costs

Costs that a company incurs during its normal business operations, paid in cash, such as wages, utilities, and rent.