ABSTRACT
Cost structure refers to the particular relationship of fixed and variable costs in an organization, department or project. Activity-based costing (ABC) is a more sophisticated approach to allocating an organization's overheads. Cost structure refers to the particular relationship of fixed and variable costs in an organization, department or project. Accounting rate method of appraising a project is conducted by calculating the profit that would be earned from each project and requires, therefore, depreciation and other accruals to be taken into account. The key advantage of using the NPV method is that it recognizes the time value of money. The internal rate of return (IRR) for a project is the discount rate that produces an NPV of zero. The US federal government's Office of Management and Budget (OMB) annually issues a set of rates, both nominal and real, for use in evaluating cost-effectiveness, lease purchase and related analyses. Non-financial factors should not be ignored in a project appraisal.
