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Explicit Cost
       
 
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Explicit Cost

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Explicit Cost
A cost that is represented by lost opportunity in actual Cash payments.
    
A business Expense that is easily identified and accounted for. Explicit costs represent Clear, obvious Cash outflows from a business that reduces its bottom-line profitability. This is in contrast with less-tangible expenses such as Goodwill Amortization, which are not as Clear cut regarding their effects on a business's bottom-line value.
    
Good examples of explicit costs would be items such as wage Expense, rent or lease costs, and the cost of materials that go into the production of goods. With these expenses, it is easy to see the source of the Cash outflow and the business activities to which the Expense is attributed.
Posted by  LISA Life Insurance Settlement Association
 
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