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Avoided cost

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Avoided cost
In context of project financing, the capital and expense that would have to be spent if the project did not proceed.

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They're fairly easy programs to implement--the marginal amount of additional costs is usually covered by the avoided cost of disposal.
Questions 1, 2 and 3 discuss timing issues and when a taxpayer must capitalize interest, Questions 4 through 13 cover the avoided cost method in detail, and Questions 14 through 20 address special rules.
 
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