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The term replacement cost or replacement value refers to the amount that an entity would have to pay to replace an asset at the present time, according to its current worth. [1] In the insurance industry, "replacement cost" or "replacement cost value" is one of several methods of determining the value of an insured item. Replacement cost is the ...
The current replacement value is defined as what monetary value the organization places on the facility. An accurate FCI is dependent on the cost estimates developed for the facility deficiencies and current replacement value. [citation needed] The FCI is a relative indicator of condition, and should be tracked over time to maximize its benefit.
A cost estimate is the approximation of the cost of a program, project, or operation. The cost estimate is the product of the cost estimating process. The cost estimate has a single total value and may have identifiable component values. A problem with a cost overrun can be avoided with a credible, reliable, and accurate cost estimate. A cost ...
Fuel costs such as power for operations, fuel for production; Public Utilities such as telephone service, Internet connectivity, etc. Maintenance of equipment; Office supplies and consumables; Insurance premium; Depreciation of equipment and eventual replacement costs (unless the facility has no moving parts it probably will wear out eventually)
Estimating the cost savings required to justify the purchase of new equipment. [13] Determining the cost of continuing with existing equipment. [14] Where an asset undergoes a major overhaul, and the cost is not fully reflected in salvage values, to calculate the optimum life (i.e., lowest EAC) of holding on to the asset. [15]
Relevant cost: The relevant cost is a cost which is relevant in various decisions of management. Replacement cost: This cost is the cost at which existing items of material or fixed assets can be replaced at present or at a future date. Shutdown cost: Costs incurred if operations are shut down, and which would not occur if operations are continued.
measuring profit on sale of inventory by reference to its replacement cost. If inventory with a historical cost of $100 is sold for $115 when it costs $110 to replace it, the profit recorded would be $5 only based on replacement cost, not $15; charging economic rent for assets, particularly property. If a business uses a 20-year-old property ...
Comparables (or comps) is a real estate appraisal term referring to properties with characteristics that are similar to a subject property whose value is being sought. This can be accomplished either by a real estate agent who attempts to establish the value of a potential client's home or property through market analysis or, by a licensed or certified appraiser or surveyor using more defined ...