What do you mean by average cost and marginal cost, Financial Management

Assignment Help:

Q. What do you mean by Average Cost and Marginal cost?

Average Cost and Marginal cost: the average cost is the combined cost as explain above, but for the difference in the form of expression. The combined cost may be expressed as the total cost of all source of the capital and the average cost as the percentage of total composite cost of the total funds employed. It is thus the weighted average of the cost of the each component of funds employed by the firm. The weights are the proportion of the share of each component of funds by the employee. The marginal cost of capital is that average cost which is concerned with the additional funds raised by the funds. While taking capital budgeting and financing decision for an existing concern. It is the marginal cost of capital which the forms based and not the average costs.


Related Discussions:- What do you mean by average cost and marginal cost

Show function of the financial decision, Q. Show Function of the Financial ...

Q. Show Function of the Financial decision? Financial decision: the second major decision is involved in financial management is the financial decision the investment decision

Caselet, 1.How would you judge the potential profit of Bajaj Electronics on...

1.How would you judge the potential profit of Bajaj Electronics on the first year of sales to Booth Plastics and give your views to increase the profit? 2. Suggestion regarding C

Which formula would you use to solve for the payment, Which formula would y...

Which formula would you use to solve for the payment required for a car loan if you know the interest rate, length of the loan, and the borrowed amount?  Explain. To answer for

Find out the price of equity shares., Following details are related to thre...

Following details are related to three companies which are identical except in terms of ''r''. Company ABC Ltd. MNC Ltd. XYZ Ltd. Cost of capital 10% 10% 10% Earn per

Steps in process of securitization, Process The process of Secu...

Process The process of Securitization involves the following steps: Transfer of assets by the originator (person holding the assets) to an entity (comp

Binomial model, The option features embedded in many bonds and fixed-...

The option features embedded in many bonds and fixed-income securities have made the binomial interest rate tree approach a valuable model for pricing debt. Binomial

Calculate the percentage of price change and regular bonds, Flying High Inc...

Flying High Inc. plans to raise $5,000,000 external financing through issuing bonds, and is considering two options: regular bonds and zero couple bonds.  The regular bonds will ha

What are the internal audits, What are the Internal audits Internal au...

What are the Internal audits Internal audit is seen as independent from management who are devising and implementing internal controls and must be able to provide advice on in

Tokyo stock exchange, Tokyo Stock Exchange In the 1870s, a securities s...

Tokyo Stock Exchange In the 1870s, a securities system was introduced in Japan and public bond negotiations began. This resulted in a demand for public trading institution, whi

Define main trends which prevailed in international business, Discuss the t...

Discuss the three main trends which have prevailed in international business throughout the last two decades. The 1980s brought a fast integration of financial markets and inter

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd