After reading this article you will learn about about the Computation of Weighted Average Cost of Capital. Weighted average cost of capital is the average cost of the costs of various sources of financing. Weighted average cost of capital is also known as composite cost of capital, overall cost of capital or average cost of capital. Once the specific cost [...]
After reading this article you will learn about the Computation of Marginal Cost of Capital. Sometimes, we may be required to calculate the cost of additional funds to be raised, called the marginal cost of capital. The marginal cost of capital is the weighted average cost of new capital calculated by using the marginal weights. The marginal weights represent the [...]
The following points highlight the four main steps involved in procedure of computing accounting income. The steps are: 1. Defining the Particular Accounting Period 2. Identifying Revenues of the Accounting Period Selected 3. Identifying Costs Corresponding to Revenues Earned 4. Matching Principle. Step # 1. Defining the Particular Accounting Period: Accounting income refers to the financial performance of the firm [...]