No, it's not the $600 you paid for those red-bottom Louboutins. Instead, acquisition cost refers to the book value a company recognizes for property, plant, and equipment it has purchased, subtracting other benefits it got when making the purchase, like state tax waivers, "cheap money loans," and free coffee.
So that's acquisition cost as it applies to one business buying stuff meaningful enough to be tracked on the balance sheet. Acquisition cost can also refer to the cost of acquiring a customer. At Shmoop, we don't spend money on marketing, so we have zero costs, other than our own blood, sweat, and tears...mainly tears, in acquiring a customer. But match.com spends a fortune advertising everywhere, and they can do fancypants math, such that in a given year, if they spend $80 million dollars on marketing and get a million new customers, than each new customer costs them, give or take, $80.
The question then revolves around whether that acquisition cost was well spent, i.e., did the customer hang around paying $25 a month or more for at least four months, or did they only sign up for one month and then go away? And/or did they sign up for one month, go away, and then come back six months later after the divorce for a year?
Like the onerous task of finding the proper spouse, identifying whether or not acquisition costs were well spent or not is a moving target.
Related or Semi-related Video
Finance: What is pooling: investment/int...3 Views
Finance allah shmoop what is pooling Well it's aggregating no
no aggregating yeah Throwing in cash together partnering pooling interests
in an investment simply refers to two or more players
getting together to invest their money in whatever form mutual
funds are are pooled investment So our index funds hedge
fund bond funds etfs reads mlps any uh pretty much
and well every other investment vehicle that can scale to
allow for two or twenty or two million investors to
all come together and invest well Why would people want
to do this scale or rather synergies of costs from
scale Whether you have one investor or ten thousand you
need to file papers and there are usually pretty much
always lawyers involved and accountants and other wall street gum
sucking gadflies and the marginal additional cost of servicing ten
thousand pooled investors is only somewhat more than servicing won
So in many cases pooling makes a lot of sense
when investors interests are generally aligned and when they're not 00:01:07.229 --> [endTime] around there's trouble
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