Before a decision
maker decides to buy a machine, e. g., he should estimate the probable costs
and earnings and calculate the net income.
The earnings
normally depend on the market and cannot be influenced. So, the cost side is
that one, where the decision maker can ‘earn or burn money’.
In some cases,
the cost of any future operation can be assessed very easily, because the
decision maker has his own experience.But very often, he must estimate the costs based on very foggy data. They are unclear, because the costs will
occur in future, for example in the next 6 years.
We sub-divide
cost calculations due to the time when we make them: pre-calculation, interim-calculation
and post-calculation.
