out-of-pocket costs

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The additional costs that will be incurred as the result of a particular decision. In some circumstances, these costs will be more relevant to decision making than the total differential cash flows. For example, an organization with limited cash resources may make a decision to pursue an investment alternative that would not have been the first choice had it not offered the lowest level of out-of-pocket costs. See also relevant cost.

Subjects: Accounting.

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