Q. Describe Historical cost and future costs?
Historical cost and future costs: another problem in the determine of cost of the capital arise on the accounts of the difference in the opening as regard the concept of cost itself. It is argued that historic cost are book cost which are related to the past and are irrelevant in the decision making process. In their opinion future cost are more relevant for the decision making. In the same manner, argument is given in a favor of specific cost and composite cost as well as implicit cost and the marginal costs.