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COST APPROACH METHOD

liced johana hernandez henandez

Created on April 1, 2024

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Transcript

COST APPROACH METHOD

By: Liced Johana HernándezGroup:212032_90Date: 01.04.2024

¿WHAT IS I T?

It is a strategy used in the valuation of technology and other intangible assets that is based on the analysis of the costs incurred in their development and implementation.

In the cost approach method of valuing technology and other intangible assets, various mathematical formulas and techniques are used to calculate the net present value (NPV) of the costs and benefits associated with the technology.

  • Companies can create value from their innovation in the following ways:
  • Product and service differentiation: Innovation allows companies to develop unique products and services that stand out in the market, giving them a competitive advantage and increasing customer demand.
  • Cost reduction: Innovation can lead to improvements in operational efficiency and process optimization, resulting in reduced production costs and increased profitability.
  • Market expansion: Introducing new technologies can open opportunities to enter new markets or expand the existing customer base, driving growth and increasing revenue.
  • Customer Loyalty: Continuous innovation allows companies to constantly offer new and exciting products and services that meet customers' changing needs and wants, helping to maintain customer loyalty.