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Costs of a business: interest, dividends, opportunity, tax

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Finance costs: tangible cost, interest, dividends; opportunity costs - loss of alternative projects using retained earnings; tax effects.

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Solution Summary

The loss of alternative projects using retained earnings and tax effects are provided. The 475 word solution presents a comprehensive discussion of costs in a business.

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The first definition of a cost is the price paid for a product or service. Beyond that, costs can be non-monetary including sacrifices, losses or penalties. Examples might include the cost to one's health for doing a certain type of job. The term 'cost' is also used in financial planning and forecasting to estimate or evaluate a future situation.

In the business world, costs can be defined as:

Interest Cost: The price paid in interest for using money from a lender rather than company capital.

Tangible costs are those that are quantifiable and can be traced to a product or as a direct cost or expense of performance.
http://www.investopedia.com/terms/t/tangible-cost.asp

Intangible costs are often not quantifiable such as customer goodwill mentioned in the link following. They are real costs, but ...

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