implicit rental rate

Definition

Firm's opportunity cost when it uses its own assets for ongoing operations rather than for other uses. This rate can either be more or less than the company's overall cost of capital. If this rental rate is lower than the company's cost of capital, the company will not likely be able to stay in business for much longer.

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The implicit rental rate was an important factor for us and I thought that we needed to pay attention to it.

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The implicit rental rate was a form of the opportunity cost issue that was mentioned during the meeting, that we could expect to occur.

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The implicit rental rate was low, so we leveraged our assets when we could, despite some analysts feeling like we were being too reckless with our assets.

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