What are the capital costs?
Non -boiled capital costs are the term used in a reference to the system for analysis of the proposed or potential capital project that the company or organization is considering. The distinctive factor between this type of cost estimation and the cost estimation method is the fact that this method simulates an environment in which the organization carries out any project that is considering a clean slate without having to borrow money or calculate the costs that naturally grow. This method of project estimation for projects is worth helping the organization to consider the project in question to give details into a clearer perspective and separate the actual cost of the project from the additional costs obtained from obtaining and operating the debt.
Illustration of the application of a company that is considering the construction of a new factory that will complement this one already that alreadyIt has, we can see uneven capital costs. Through the application of the principle of non -perpetrated capital costs, such a company will be able to distinguish between the actual costs of the proposed factory and other foreign factors. This is due to the fact that at capital costs of difficult costs, the company will calculate only the exact amount that the project will require, including the cost of obtaining land, costs for the purchase of building materials, construction costs and costs for the purchase of various equipment and machines that will be inserted into the factory. In this case, it is clear that only the exact money that will be used for the project will include the cost calculation.
On the other hand, where the company does not apply to the cost of capital and instead decides to use the opposite, which is the capital lever will include other factors in the project costs. The Company as such will include the cost of obtaining project funding, including the payment of interest for loan and divid payoutEnd shareholders. Other costs will also include any type of brokerage fees that can be used to finance.