- What is a Economic Loss Recovery Calculator?
The Calculator measures the
economic loss value
of a business and calculates its return on investment to business. Updated annually, the calculator draws on ten different data sources to provide an industry-wide standard that is also: Flexible: Users provide information on the event type, year, and industry focus. Optional entries include costs and contract values associated with the event. If optional information is not provided, the calculator uses industry averages of the city’s cost of doing business for that event size and type.Comprehensive: Direct and indirect impacts are measured for business with key results defined in terms of business sales generated, jobs and personal income supported, and total federal, state, and local taxes generated as a result of the event.
Economic Recovery Calculator
- How to calculate economic profit?
– Micro made simple
– Economic Costs vs. Accounting Costs
A firm’s “accounting costs” are all the financial costs it incurs to produce output. For example, for Pauline’s Pies—a business that makes frozen pizzas—accounting costs would include rent, labor, ingredients, utility bills, insurance, and any licensing fees the business must pay. A firm’s “accounting profit” (or loss) is equal to the firm’s revenue, minus the firm’s accounting costs.
The concept of economic profit is crucial because firms make decisions based on economic profits rather than accounting profits. That is, firms want to maximize their economic profits rather than accounting profits. Since our focus is economics and not accounting, we use the term “costs” to mean “economic costs” and “profit” to mean “economic profit” unless otherwise indicated.
- Original investment
- Total amount that was contributed on the investment that has incurred loss.
- Current value
- Current market value of the investment after loss. This is the remaining value of the original investment .
- Additional contributions
- Fresh money you can bring to this investment during each period. It is assumed that you will bring this money at the beginning of every period.
- Expected rate of return
- The percentage rate of return by which you want your funds to grow. Use after-tax rate of return if you want the calculator to adjust for any interest, tax, or dividend. This rate will compound annually.
- Expected inflation rate
- Your anticipated rate of average inflating over the long-term. If you are residing in US this is the increase in general price level as defined by Consumer Price Index (CPI).
- Adjust for inflation
- Checking this box will allow the calculator to adjust the overall financial or business calculations and your expected rate of return for inflations.