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Unformatted text preview: Types of Cost Behavior
Fixed costs Variable costs Mixed costs Semivariable costs Semifixed costs Chapter 10 Forensic and Investigative Accounting 20 Cost Behavior Assumptions
Basis of cost behavior estimates Relevant range assumption Time assumption Ways of estimating cost behavior Account analysis method High-low method Regression analysis Engineering or work-measurement method Chapter 10 Forensic and Investigative Accounting 21 Discounting After-trial Damages
There are two major approaches to discount amounts to present values. One approach is to project a plaintiff's hoped-for income stream by modifying losses to a realistic expectation by factoring in future losses to a present value at a riskreduced relatively low discount rate. (continued on next slide)
Chapter 10 Forensic and Investigative Accounting 22 Discounting After-trial Damages Another approach is to project the hopedfor-but-lost amounts and then apply a higher discount rate that already includes risk or uncertainty in order to determine the present value. Chapter 10 Forensic and Investigative Accounting 23...
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