Acquisition Cost
 |
Definition of 'Acquisition Cost'1. The cost that a company recognizes on its books for property or equipment after adjusting for discounts, incentives, closing costs and other necessary expenditures, but before sales taxes.2. The cost of a business to acquire a new customer. The company recognizes costs, including marketing and incentives, to introduce new customers to the company's products and services. The customer acquisition cost is calculated by dividing total acquisition costs by total new customers over a set period of time. Also known as "cost of acquisition." |
 |
Investopedia explains 'Acquisition Cost'1. Acquisition costs recognize more realistic costs on a company's financial statements. The acquisition cost of property and equipment recognizes any discounts or additional costs that the company will experience.2. Customer acquisition costs are also important for companies to measure, as it aids in planning future capital allocations to things like marketing budgets and sales discounts. The company should also look at customer loyalty and whether the company will be able to retain customers easily. |
Related Definitions
Articles Of Interest
-
Great Expectations: Forecasting Sales Growth
Predicting sales growth can be something of a black art, unless you ask the right questions. -
Measuring Company Efficiency
Three useful indicators for measuring a retail company's efficiency are its inventory turnaround times, its receivables and its collection period. -
Tips For Boosting Your Business
Find out how butter up new clients, build up old files and better your bottom line. -
How rapidly can expanding sales reduce a firm's earnings?
In order to operate and make money, a company must spend money. Revenue - the dollar amount of sales - can be seen on a company's income statement. From there, various expenses are deducted such ... -
What is property, plant and equipment, and what does it mean?
Property, plant and equipment (PP&E) is a term that describes an account on the balance sheet. The PP&E account is a summation of all a company's purchases of property, manufacturing ... -
War's Influence On Wall Street
Blitzkrieg? Dawn raids? Sounds like the markets and the battlefield have a few things in common. -
How Risk Free Is The Risk-Free Rate Of Return?
This rate is rarely questioned - unless the economy falls into disarray. -
Top 4 Most Scandalous Insider Trading Debacles
Here we look at some of the landmark incidents of insider trading. -
Nobel Winners Are Economic Prizes
Before you try to profit from their theories, you should learn about the creators themselves. -
Cashing In On Corporate Restructuring
Companies use M&As and spinoffs to boost profits - learn how you can do the same.
Free Annual Reports