Jaw-dropping replacement cost in managerial economics
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Definition: The Replacement Cost is the cash outlay that firm has to pay in order to replace an old asset at the current market price. Simply, the amount paid to replace the existing property with the new one having the similar utility, without considering the depreciation constitutes the replacement costs. Draw a labelled diagram of typical plant cell.
- REPLACEMENT COST IN MANAGERIAL ECONOMICS
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- What is Replacement Cost? definition and meaning - Business Jargons
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For managerial decisions, however, historical costs may not be appropriate. Instead, replacement costs are relevant for these purposes.
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