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5 Examples of Prospective Costs

 , updated on July 16, 2023
Prospective cost is a future expenditure or past cost that can be recovered. In other words, it is any cost that can be altered by your current or future decisions and strategies. Prospective costs can be contrasted with sunk costs, a past cost that can't be recovered.

Examples

Land that can be sold after a development project fails.
Cutting back on advertising when products sales are lower than expected.
A retail shop that cuts back on shifts when a recession hits.
A contingent workforce that can be released when a project fails.
Inventory that can be sold at a clearance price to make way for a new product line.

Value

Making decisions based on costs that you can change as opposed to sunk costs that are already unrecoverable.
Overview: Prospective Cost
Type
Definition (1)
A future expenditure or past cost that can be recovered.
Definition (2)
A cost that is within your power to change within the context of a decision or strategy.
Value
Related Concepts
Next: Opportunity Cost
More business costs:
Abatement
Applied Cost
Business Equipment
Capacity Cost
Capex
Capital Improvement
Carrying Costs
Closing Costs
COGS
Cost Of Capital
Cost Of Revenue
Cost Of Living
Direct Cost
Distress Cost
Expenses
CAC
Fixed Costs
Friction Cost
Employee Costs
Holding Costs
Intangible Cost
Marginal Cost
Operating Cost
Operating Expenses
Opex
Legacy Costs
Outlay Cost
Lifetime Cost
Overhead Costs
Menu Costs
Relevant Cost
Shrinkage
Normal Costs
Sunk Costs
Tangible Cost
Operational Costs
Travel Expenses
Unit Cost
Opportunity Cost
Variable Costs
Prospective Cost
Semi Variable Cost
Step Costs
Switching Costs
Transaction Costs
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