A Closer Look at Cost Approach Assumptions

  • Kimberly K. MerrimanEmail author


This chapter provides further discussion of several key assumptions underlying the cost approach and suggests ways to add rigor to the cost evaluation. Many of these points were brought up throughout the preceding chapters in a cursory fashion. We delve into further detail here in order to gain a more critical understanding of the primary approach to valuing the assembled workforce. Specific topics include the conceptual rationale of the assembled workforce as an “owned” asset, a closer look at the entrepreneurial return and lost productivity, refinements to workforce assemblage costs, and the special circumstances surrounding non-fungible and short-term workers.


Lost productivity of assembled workforce Entrepreneurial return on assembled workforce Depreciation of human capital Obsolescence of human capital 

Copyright information

© The Author(s) 2017

Authors and Affiliations

  1. 1.Manning School of BusinessUniversity of Massachusetts LowellLowellUSA

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