explicit cost


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Explicit Cost

A direct expense that a business incurs in conducting an activity. Examples of explicit costs include salaries, wages, materials, etc. An explicit cost can be recurring, or it can be a one-off expense. Likewise, it can be predictable, like the rent, or it can vary from time to time, like the electric bill. Less commonly, an explicit cost is called an outlay cost. See also: Implicit cost.

explicit cost

a payment made by a firm for the use of FACTOR INPUTS (labour, capital) not owned by the firm. Unlike IMPLICIT COSTS (which represent payments for the use of factor inputs owned by the firm itself), explicit costs involve the firm in purchasing inputs from outside FACTOR MARKETS.
References in periodicals archive ?
What is the tax basis of whole life policies which do not have explicit cost of insurance charges?
Unlike universal life, whole life policies work differently and there are no explicit cost of insurance charges for whole life.
Instead, I suggest exploiting the existence of the less ambiguous and controversial terms implicit cost and explicit cost.
420) categorize the bid-ask spread as an explicit cost and Huang (2013, p.
Foreign currency loans have a visible, explicit cost, but also a hidden, uncertain cost component, and this is what triggers abusive clauses.
The cost savings related to the audit "is not just the explicit cost of paying the auditor, but somebody inside the company has to take time out of his or her schedule to work with the auditor," Power says.
Porras states that the explicit cost of capital is the rate of return of the cash flows generated by the financing opportunity (the equity cost is the cost of opportunity).
Any explicit cost of such services including remuneration of experts/advisors shall be borne by NIBP funded by UNDP.
Even though various costs are included in the expense ratio, most of these expenses could be associated with cost of financial market research, as Indro et al (1999) considered expense ratio to reflect the fund manager's explicit cost of research.
She contends that current salaries yield insufficient payback, because of the explicit cost of additional education and the opportunity cost of a year of foregone salary, both assertions agreed to wholeheartedly by the author.
Explicit Cost Dynamics: An Alternative to Activity-Based Costing.
2 To capture the cost of holding money in a static model, one must introduce an explicit cost, as in the Appendix in Gokcekus and Tower (1997).