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The most commonly used inventory valuation methods under a perpetual system are: first-in first-out (FIFO) last-in first-out (LIFO) (highest in, first out) (HIFO) average cost or weighted average cost; These methods produce different results because their flow of costs are based upon different assumptions.
[1] The average cost is computed by dividing the total cost of goods available for sale by the total units available for sale. This gives a weighted-average unit cost that is applied to the units in the ending inventory. There are two commonly used average cost methods: Simple weighted-average cost method and perpetual weighted-average cost ...
The weighted arithmetic mean is similar to an ordinary arithmetic mean (the most common type of average), except that instead of each of the data points contributing equally to the final average, some data points contribute more than others.
The time-weighted return on investment tells you how it performed objectively. ... When we write that the S&P 500 has an average annual return of around 11%, for example, this is a time-weighted ...
The dual use of the word "duration", as both the weighted average time until repayment and as the percentage change in price, often causes confusion. Strictly speaking, Macaulay duration is the name given to the weighted average time until cash flows are received and is measured in years. Modified duration is the name given to the price ...
A. Weighted value basis One method for determining VOWD for major equipment is based on weighted values of items of equipment. At the outset of the project a list of equipment is prepared, and the weighted (%) value of each piece of equipment, with the sum of the weighted values of all items totaling 100%.
The overlap method uses prices collected for both items in both time periods, t and t+1. The price relative P ( N ) t + 1 {\displaystyle {P(N)_{t+1}}} / P ( N ) t {\displaystyle {P(N)_{t}}} is used. The direct comparison method assumes that the difference in the price of the two items is not due to quality change, so the entire price difference ...
EVA = (r − c) × capital [the spread method, or excess return method] where r = rate of return, and c = cost of capital, or the weighted average cost of capital (WACC). NOPAT is profits derived from a company's operations after cash taxes but before financing costs and non-cash bookkeeping entries.