capital cost

• Capital Cost

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Economics of new nuclear power plants - Capital costs

1 Because of the large capital costs for nuclear power, and the relatively long construction period before

revenue is returned, Cost of capital|servicing the capital costs of a nuclear power plant is the most

important factor determining the economic competitiveness of nuclear

energy


Economics of new nuclear power plants - Capital costs

1 This favours generation plant types with lower capital costs even if associated fuel costs are higher


Glossary of fuel cell terms - Capital cost

1 : Capital cost are costs incurred on the purchase of fuel cells, buildings, construction and equipment to be used in the use of fuel cells or the

rendering of it.


Capital costs

1 'Capital costs' are fixed, one-time expenses incurred on the purchase of

real property|land, buildings, construction, and equipment used in the

production of good (economics and accounting)|goods or in the rendering of Service (economics)|services. Put simply,

it is the total cost needed to bring a project to a commercially operable status. Whether a particular cost is

capital or not depend on many factors such as accounting, tax laws, and Materiality (auditing)|materiality.


Capital costs - Categories

1 Capital costs include expenses for tangible goods such as the purchase of plants and machinery, as well as

expenses for intangibles assets such as trademarks and software

development.


Capital costs - Categories

1 Capital costs are fixed and are therefore independent of the level of output.


Capital costs - Example

1 For example, a fossil fuel power plant's capital costs include the following:


Capital costs - Funding

1 Government generally provides subsidies through investments and

partnerships in the initial capital costs of research and manufacturing

infrastructure that cannot be matched by investor-owned

companies.


Capital Cost Allowance

1 'Capital Cost Allowance' (CCA) is the means by which Taxation in

Canada|Canadian businesses may claim depreciation expense for

calculating taxable income under the Income Tax Act (Canada). Similar

allowances are in effect for calculating taxable income for

provincial purposes.


Capital Cost Allowance - Capital property

1 CCA is calculated on undepreciated capital cost (UCC), which is generally defined as:



1 * the capital cost of property that is acquired or made available for use

(whichever is the later date)



1 * less the proceeds of disposition for a sold asset (but no greater than its original capital

cost)


Capital Cost Allowance - CCA calculation

1 :CCA = capital cost allowance for the current fiscal period


Capital Cost Allowance - CCA calculation

1 :UCC = undepreciated capital cost before claiming CCA in the current fiscal period


Capital Cost Allowance - Types of allowance

1 * paragraph 20(1)(a) allows a deduction, in computing the income from a business or property, of any

amount allowed by regulation in respect of the capital cost of a

property.


Capital Cost Allowance - Typical classes of assets for CCA purposes

1 In contrast to the practice followed in the United States for depreciation

there is no penalty for failing to claim Capital Cost Allowance. Where a

taxpayer claims less than the amount of CCA to which he is entitled the pool

remains intact, and available for claims in future years. Unclaimed

amounts are not subject to recapture.


Capital Cost Allowance - Capital budgeting|Capital investment appraisal under CCA rules

1 :* assets that are deemed to constitute a separate class of

property, thus not becoming part of a capital cost pool


Capital Cost Allowance - Capital budgeting|Capital investment appraisal under CCA rules

1 :* scenarios where disposal values at a future date are part of the

appraisal calculation, leading to a deduction from the capital cost pool, a recapture of depreciation, or the calculation of a taxable capital gain


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