Cost Recovery

The first basic cost recovery strategy is the cost of goods sold which would require the company to take something that is already in stock, and turn around and sell it at a lower price to recover the funds that the company has spent on the product. Secondly, the company has depreciation, which allows the company to sell the assets now possibly at a discounted rate because the cost may be different in the future because of the depreciation in value. Furthermore, amortization is used for the intangible assets that the company has which accumulates value over time. If a company decided to buy a contract for five years for another retailer in the area. The contract could be sold or completed within that period with the company recovering all the funds. The last cost recovery strategy is the depletion this method is part of the passive income from the company’s outside sources. These outside sources could include rent for other space in a different building or the company paying for natural resources surrounding the property. A company would implement a cost recovery strategy to assure that all measures have been taken. If a company were to not spend enough time, preparing for what may happen in the future could cause the business to close. This would result in the company closing and not being able to pay the bills that it has incurred during business. In order for a business to survive, they must earn the consumer’s trust and treat the consumer as if they are the most important thing surrounding their company.