MIE258H1 Study Guide - Midterm Guide: Whole-Life Cost, Inventory Turnover, Current Liability
20 Nov 2012
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Leverage: allows increase in return from borrowing other peoples stock ie: borrow money @ 5% get return of 28% phases cost concepts. Overhead (fixed) machinery total cost = direct + overhead. Past (sunk) costs: unrecoverable cash , spent past: economic view ignore sunk, cannot be changed. Estimated cost of litigation less than cost of repairs. estimate wrong would have been cheaper. Concord -overestimated market, banned from flying over land due to noise. not incorperating time value of money breakeven: revenue=cost profit region: revenue>cost loss region: revenue cost of last. Assets [current or fixed ]= liabilities + owners equity. Secondary market market value: what someone is willing to pay for it [the secondary share market between buyers] illiquid stock - fluxuations in stock price in big gaps goodwill: venture capitalist : early investor. Balance sheet: position at the end of fiscal period assets: [fixed house, current ie cash], liabilities.
