CHAPTER 19

What is Explicit Cost Dynamics?

Explicit Cost Dynamics is what resulted from the cash flow modeling I mentioned earlier in the book that was created to address challenges that were created by accounting. At the time, I had not understood the differences between costC and costNC. I thought all costs should be defined as what I now call costC and that would ensure they were aligned with cash flow. This was an area of major contention with many in the accounting field. They defined costs differently, and so when we would talk about costs, although we used the same word, what we were talking about was vastly different.

The idea behind ECD is fairly simple. At its most basic level, ECD looks at what your cash obligations are and provides ...

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