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What is an 'Explicit Cost'
An explicit cost represents clear, obvious cash outflows from a business that reduce its bottom-line profitability. This contrasts 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 as it is easy to see the source of the cash outflow and the business activities to which the expense is attributed.
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Explicit Cost Definition | Investopedia
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<span>What is an 'Explicit Cost'
An explicit cost represents clear, obvious cash outflows from a business that reduce its bottom-line profitability. This contrasts 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 as it is easy to see the source of the cash outflow and the business activities to which the expense is attributed.
BREAKING DOWN 'Explicit Cost'
An explicit cost is an expense that has occurred and has a clearly defined dollar amount. These expenses are incurred Summary
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