The cost of financing calculation reveals how much a business is charged to finance the assets that are shown on a company's statement of financial position.

Question

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The cost of financing calculation is used to determine the total expense a company incurs to finance its assets, which includes interest payments on debt and other related financing costs. This is directly related to the assets shown on the company's statement of financial position (balance sheet).

The Cost of Financing Calculation Reveals How Much a Business