Publications

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June 2009
Case

Midland Energy Resources, Inc.: Cost of Capital

By: Timothy A. Luehrman and Joel L. Heilprin

The senior vice president of project finance for a global oil and gas company must determine the weighted average cost of capital for the company as a whole and each of its divisions as part of the annual capital budgeting process. The case uses comparable companies to... View Details

Keywords: Risk Assessment; Risk and Uncertainty; Risk Management; Cost of Capital; Cash Flow; Capital Structure; Valuation; Capital Budgeting; Energy Industry

16 Aug 2012
Working Paper Summaries

The Cost of Friendship

Keywords: by Paul Gompers, Vladimir Mukharlyamov & Yuhai Xuan

March 1989 (Revised April 1998)
Case

Marriott Corporation: The Cost of Capital (Abridged)

By: Richard S. Ruback

Gives students the opportunity to explore how a company uses the Capital Asset Pricing Model (CAPM) to compute the cost of capital for each of its divisions. The use of Weighted Average Cost of Capital (WACC) formula and the mechanics of applying it are stressed. View Details

Keywords: Cost of Capital; Mathematical Methods

15 Mar 2021
Working Paper Summaries

The Health Costs of Cost-Sharing

Keywords: by Amitabh Chandra, Evan Flack, and Ziad Obermeyer

2020
Working Paper

The Cost of Anonymous Lemons

By: Amar Bhidé

Rules that restrict information required in negotiated private transactions have spurred a vast increase in the scope of anonymous financial markets, particularly in the US. The subtle costs of the information restricting rules raise questions about the social value of... View Details

Keywords: Information Asymmetry; Securities; Securitization; Regulation; Liquidity; Information; Financial Markets; Governing Rules, Regulations, and Reforms; Financial Liquidity

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October 1994
Case

Isuzu Motors, Ltd.: Cost Creation Program

Describes the various value engineering techniques used by Isuzu. Shows how Isuzu reduces the cost of its products while increasing their functionality within the constraints of a target cost. View Details

Keywords: Cost Accounting; Cost Management

25 Sep 2019
Research & Ideas

The Economic Cost of Physician Burnout

Physician burnout costs the United States health care industry $4.6 billion a year, a number that brings a new spotlight to an age-old problem. In a paper published in the journal Annals of Internal Medicine this past June, a research... View Details

Keywords: by Michael Blanding; Health

September 1992 (Revised May 2004)
Background Note

Activity Accounting--Another Way to Measure Costs

By: William J. Bruns Jr.

Explains the principal differences between traditional cost accounting systems and activity-based costing systems. View Details

Keywords: Cost Accounting

September 8, 1999
Article

Cost of Giving

By: John Quelch and William Conner

23 Jan 2018
Working Paper Summaries

Transaction Costs and the Duration of Contracts

Keywords: by Alexander MacKay

March 1994 (Revised November 1994)
Case

Komatsu Ltd. (A): Target Costing System

Komatsu, a leading manufacturer of construction equipment, seeks to expand aggressively through the 1990s. Key to its competitiveness is a strict adherence to target costs throughout the product development process. Komatsu conducts several design-for-manufacturability... View Details

Keywords: Cost; Machinery and Machining; Expansion; Product Development; Manufacturing Industry

January 2005 (Revised March 2005)
Case

Parisian: productivity and selling cost

By: Rajiv Lal and Arar Han

Presents the dilemma facing George Jones with respect to the high selling cost at Parisian Department Stores. The challenges to be considered reflect issues at different levels of the organization, including individual salespeople, the store itself, and the merchandise... View Details

Keywords: Cost; Executive Compensation; Production; Sales; Salesforce Management; Motivation and Incentives; Retail Industry

August 1988 (Revised November 1988)
Case

Texas Instruments: Cost of Quality (A)

By: Robert S. Kaplan

Texas Instruments implements a Cost of Quality (COQ) system as part of a company-wide "Total Quality Thrust." After several years of operation, group management questions whether or not the COQ system should be updated to make it more useful in identifying areas for... View Details

Keywords: Quality; Performance Improvement

April 1989 (Revised January 1990)
Case

Texas Instruments: Cost of Quality (B)

By: Robert S. Kaplan

A division questions whether to retain, modify, or abandon its cost of quality system now that more direct measures of quality have been adopted. Discusses the role of quality cost measurement in a mature quality management system. View Details

Keywords: Measurement and Metrics; Quality

September 2016
Article

Value Based Care and Bundled Payments: Anesthesia Care Costs for Outpatient Oncology Surgery Using Time-driven Activity-based Costing

By: Katy E. French, Alexis B. Guzman, Augustin C. Rubio, John C. Frenzel and Thomas Feeley

Background: With the movement towards bundled payments, stakeholders should know the true cost of the care they deliver. Time-driven activity-based costing (TDABC) can be used to estimate costs for each episode of care. In this analysis, TDABC is used to both... View Details

Keywords: Cost; Insurance; Health Care and Treatment; Insurance Industry; Health Industry