ECONOMICS

Detailed explanation-1: -In economics, an implicit cost, also called an imputed cost, implied cost, or notional cost, is the opportunity cost equal to what a firm must give up in order to use a factor of production for which it already owns and thus does not pay rent. It is the opposite of an explicit cost, which is borne directly.

Detailed explanation-2: -An imputed cost is an invisible cost that is not incurred directly, as opposed to an explicit cost, which is incurred directly. Imputed costs do not appear on financial statements. Imputed costs are also known as “implicit costs, ” “implied costs, ” or “opportunity costs."

Detailed explanation-3: -Notional costs – These are non-cash costs. They are not relevant to a decision because they fail to meet the criteria of being a cash flow. Examples of these costs include notional rent and depreciation. Committed costs – These are costs that have been committed to regardless of the outcome of the decision.

Detailed explanation-4: -What is an Imputed Cost? An imputed cost, also known as an implicit cost, notional cost, or implied cost, opportunity cost and implied cost. This refers to the cost incurred when an asset that can be invested is used or is serving another purpose.

Detailed explanation-5: -Implicit costs are also referred to as imputed, implied, or notional costs.