Capitalized Cost Calculator

Calculate Capitalized Cost





What is Capitalized Cost?

The capitalized cost (CC) is the total cost of an asset, including the initial cost (IC) and the present value of the maintenance costs (MC) over its useful life, discounted at the interest rate (R). This metric is used to evaluate the total cost of ownership of an asset.

Formula

The formula to calculate the capitalized cost (CC) is:

\[ CC = IC + MC \left(\frac{1}{R/100}\right) \]

Where:

Example

Let's say the initial cost (IC) is $10,000, the maintenance cost (MC) is $500 per year, and the interest rate (R) is 5%. Using the formula:

\[ CC = 10000 + 500 \left(\frac{1}{5/100}\right) = 10000 + 500 \times 20 = 10000 + 10000 = 20000 \text{ dollars} \]

So, the capitalized cost (CC) is $20,000.

Extended information about "Capitalized-Cost-Calculator"

Formula for Capitalized Cost

Definition: This formula calculates the capitalized cost of an asset.

Formula: \( CC = IC + MC \times \left( \frac{1}{R/100} \right) \)

Example: \( CC = 10000 + 500 \times \left( \frac{1}{5/100} \right) \)

How to Find Capitalized Cost

Definition: This formula helps in finding the capitalized cost of an asset.

Formula: \( CC = IC + MC \times \left( \frac{1}{R/100} \right) \)

Example: \( CC = 15000 + 600 \times \left( \frac{1}{4/100} \right) \)

What is a Capitalized Cost

Definition: Capitalized cost refers to the total cost of acquiring and preparing an asset for use, including purchase price, installation, and other related expenses.

How to Capitalize Costs

Definition: This formula helps in capitalizing costs associated with an asset.

Formula: \( CC = IC + MC \times \left( \frac{1}{R/100} \right) \)

Example: \( CC = 20000 + 700 \times \left( \frac{1}{6/100} \right) \)

What is Capitalizing a Cost

Definition: Capitalizing a cost means adding the cost of an asset to the balance sheet rather than expensing it immediately. This spreads the expense over the useful life of the asset.

What Costs are Capitalized

Definition: Costs that are capitalized include purchase price, installation costs, transportation fees, and any other expenses necessary to prepare the asset for use.

Definition of Capitalized Cost

Definition: Capitalized cost is the total cost incurred to acquire and prepare an asset for use, which is then added to the balance sheet and depreciated over time.

Capitalize the Cost Meaning

Definition: To capitalize a cost means to record it as an asset on the balance sheet, spreading the expense over the asset's useful life through depreciation or amortization.

What is Capitalised Cost

Definition: Capitalised cost refers to the total expenditure incurred to acquire and prepare an asset for use, which is then recorded on the balance sheet and depreciated over time.

Costs that can be Capitalised

Definition: Costs that can be capitalised include purchase price, installation costs, transportation fees, and other expenses necessary to bring the asset to a usable state.